Translated material
The price of a “special operation” in Ukraine. Online August 17
The Bell continues to conduct online, dedicated to the economic consequences of the "special military operation" in Ukraine, which began on February 24
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This online is complete. Read the continuation here .
21:50 The US Federal Reserve, deciding to raise the rate by 0.75 p.p. in July, they talked about the risks of excessive tightening of the policy and did not rule out a transition to smaller increments, writes Bloomberg. Given the constantly changing economic environment and the long non-linear lags linking the rate and the real economy, a slowdown in rate hikes while assessing the cumulative impact of the measures already taken seems likely, the Fed meeting transcript says.
The content of the transcript, combined with good data on the labor market and July inflation in the US, dismisses expectations of a new big rate hike in September - now the market estimates moves of 0.75 and 0.5 percentage points as equally likely. After its release, the dollar and the yield of two-year US government bonds fell, shares rose in price.
19:20 Deflation in Russia continues : according to the results of the week by August 15, prices fell by 0.13%, and inflation fell below 15% year-on-year (to 14.87%), follows from Rosstat data. Monthly deflation in Russia in July accelerated to 0.39% from 0.35% in June, the weekly deflation was even lower the previous week - 0.08%.
New data support the deflation hypothesis in Russia for all three summer months in a row. Economists' opinions about whether the economy is entering a deflationary spiral, as well as when and how prices will return to the economy, The Bell cited here .
18:37 Following the American banks, European ones also began to give customers the opportunity to get rid of Russian government bonds in the open OFAC from July 22, a three-month window, writes the Financial Times. But not all: deals are being carried out by UBS, Barclays and Deutsche Bank, while Credit Suisse and HSBC have so far abstained. On a per-bank basis, the amounts are not that big, but symbolically important: this is the first noticeable, albeit temporary, easing of sanctions against Moscow, the newspaper writes.
deals with Russian government debt resumed Following OFAC's clarification, some American investment banks , including JPMorgan, Bank of America and Citigroup. Transactions are conducted with the utmost care, for example, with separate cancellation agreements in case of problems with mutual settlements. At the end of February, foreign investors held about half of the $40 billion in Russian government bonds.
16:38 The head of a large crypto broker Genesis Global Trading, Michael Moreau , is leaving the company , which will cut 20% of its 260 employees. Genesis began operations with bitcoin back in 2013, but is now better known as the largest lender to the collapsed crypto project Three Arrows Capital. About what to expect from stablecoins at the beginning of the crypto winter, wrote for The Bell. Pavel Komarovsky, the author of the RationalAnswer blog,
15:16 Israel and Turkey resume full-fledged diplomatic relations, including the exchange of ambassadors. Recep Tayyip Erdogan and Israeli Prime Minister Yair Lapid confirmed the final agreement by phone today. Diplomatic relations were severed in 2018 after clashes in the Gaza Strip.
14:17 The world's largest state investment fund, Norway, suffered the largest losses in its history in the first half of the year - $174 billion out of $1.2 trillion, or 14.4%. The management reminded that the fund works "for a long time", and even such losses are not a disaster for it. Last year, the fund earned 14.5%.
Unusually, the fund lost on both equities and bonds (17% and 9.3% respectively). Unexpectedly profitable (13%) was the traditional energy sector, which the fund got rid of, "green" energy brought a loss of 13.3%, and big tech - 28%.
The fund dumped a significant part of Russian assets on the ESG agenda back in 2021 and before trading stopped in March. At the end of last year, their share in the portfolio obviously did not exceed 3% . You can recall how the markets reacted to the events of the beginning of the conflict in Ukraine here .
13:14 Large for Europe (175 thousand tons) Slovalco plant in Slovakia will stop the production of primary aluminum in September, the said main owner of the enterprise, the Norwegian Norsk Hydro, . Despite the already reduced energy-intensive production, current electricity prices do not allow us to expect anything but losses from the company in the short term, the company writes.
This is another milestone of the European energy crisis: on the eve of the termination of zinc production, the Dutch Nyrstar announced. Aluminum quotes rose 2% on the news about Slovalco - they are constrained by increased supplies from China this year. Russian aluminum has not yet come under European sanctions, but its supplies are declining due to the expiration of pre-war contracts and complicated logistics. The EU, meanwhile, reduced primary aluminum smelting by at least 10%.
12:10 Inflation in the UK in July for the first time in 40 years exceeded 10% (and amounted to 10.1%). Consumer prices in the country are growing faster than the forecasts of economists, who expected inflation at 9.8%. In June it was 9.4%. The greatest contribution to the monthly growth in consumer prices was made by the rise in prices for food products and non-alcoholic beverages.
“Now with inflation more than five times the Bank of England’s target, the question is not whether it will tighten the measures, but how much?” . says Bloomberg Economics economist The last time the Bank of England raised the key rate on August 4 - by 0.5 percentage points, to 1.75%. This is the sharpest increase in 27 years. According to the regulator's forecast, inflation will accelerate to 13% by the end of the year. In the fourth quarter, the Bank of England expects a recession.
11:07 Germany has calculated that its current gas reserves will be enough for less than three months in the event of a complete cessation of supplies from Russia. The head of the German energy regulator noted that Germany is now stocking gas at a faster pace, but it is unlikely that it will be possible to fill all storage facilities by 95% by November, as previously planned - three-quarters of the storage facilities will reach the maximum goal.
On Wednesday, the injection of gas into underground storage facilities in Europe fell to the lowest levels due to hot and dry weather.
8:50 Highlights for the night and morning:
- The Ministry of Economic Development has significantly improved the forecast for the ruble exchange rate, GDP and inflation in 2022. The agency expects a decline in GDP this year by 4.2% instead of 7.8%, which were included in the May forecast. Inflation at the end of the year will be 13.4% instead of 17.5%. In addition, the Ministry of Economic Development assumes that the fall in real disposable incomes of the population will be much less than previously expected: by 2.8% instead of 6.8%.
- Deputies from the New People are asking the Prosecutor General's Office to re-check Instagram (owned by the recognized extremist Meta) for violations of the law and, if they are eliminated, unblock the social network, Kommersant . writes Blocking Instagram has led to massive use of "dubious VPN services" as well as a drop in income for small and medium-sized businesses, for which the social network was often the only point of sale, the party points out. Experts believe that while the reasons for unblocking Instagram are not enough and this probability is extremely small.
- About half of the air traffic controllers working in Russia - approximately 15,000 people - are now in "partial downtime", learned Vedomosti . According to the publication, this is stated in a letter sent by the President of the Federal Trade Union of Air Traffic Controllers (FPAD) to the Prosecutor General's Office. Back in May, the trade union appealed to the authorities for help: the FPAD asked the president to allocate up to 15 billion rubles of state aid to the main air navigation enterprise.
- More than half of Russians - 60% - believe that it is better for children to stay in Russia than to be adopted abroad, RBC reports , citing a survey by VTsIOM. In the ten years since the adoption of the “Dima Yakovlev law”, the level of his support has grown by 13%. The most common argument of the supporters of the ban is: “where you were born, it came in handy there”, that is, children should stay in their own country. They also worry that Russian children are not safe abroad, that they will end up in same-sex families or be raised with a sense of hatred for Russia. 32% of respondents were in favor of foreign adoption.