NEWSLETTER
Thursday / September 29Sep 29
Friday / May 6
Hungarian objection
Hungary accuses Brussels of threatening EU unity with its plans to impose an embargo on Russian oil imports, saying Budapest would not support proposals that would undermine its energy security.
Prime minister Viktor Orbán told European Commission president Ursula von der Leyen in a letter reported by the Financial Times that Hungary was unable to support the EU’s latest sanctions plan “in its current form”.
“If the commission insists on the adoption of its proposal, it will have to bear full responsibility for a historical failure in the course of European integration,” Orbán said.
Landlocked Hungary, which relies heavily on Russian oil, and Slovakia would benefit from a longer phase-out period under the EU proposals. But the package still went far beyond the EU consensus, Orban wrote to von der Leyen.
Orbán said the sanctions would further elevate energy prices with no mitigating measures from the EU.
The commission held talks with Hungary on Thursday and EU diplomats remain hopeful that a deal can be reached within days, with possible concessions including EU money to build new infrastructure.
“They are tough negotiators but ultimately open to compromise,” said one. “We have already agreed five sanctions packages with Hungary.”
The EU has agreed to end imports of Russian coal but has so far refrained from a ban on Russian gas, with countries including Germany still heavily reliant on these supplies.
BoE rate
The Bank of England on Thursday raised interest rates 13 years' high.
In the expected move, policymakers voted for the fourth consecutive rate hike since December.
The Bank’s Monetary Policy Committee approved a 25-basis point increase by a majority of 6-3, taking the base interest rate up to 1%. The Bank said the members in the minority preferred to increase interest rates by 0.5 percentage points to 1.25%.
The Bank expects U.K. inflation to rise to roughly 10% this year as a result of the Russia-Ukraine war and lockdowns in China
Russian rouble strengthens
The Russian rouble briefly reached its highest level against the dollar since March 2020 on Thursday, supported by capital control.
The volatile currency hit a high of 65.31 per dollar in early trading on the Moscow Exchange.
The rouble has rallied in the past few weeks thanks to mandatory conversion of foreign currency by export-focused companies. Also, there has been weak demand for dollars and euros amid waning imports and restrictions on cross-border transactions.
Against the euro, the rouble was 1% stronger at 69.77 , hovering at levels last seen in February 2020.
US stocks
US stocks fell back sharply on Thursday in one of the worst days since 2020.
The Dow Jones Industrial Average lost 1,063 points, or 3.12%, to close at 32,997.97. The tech-heavy Nasdaq Composite fell 4.99% to finish at 12,317.69, its lowest closing level since November 2020. Both of those losses were the worst single-day drops since 2020.
The S&P 500 fell 3.56% to 4,146.87, marking its second worst day of the year.
Large tech stocks were under pressure, with Facebook-parent Meta Platforms and Amazon falling nearly 6.8% and 7.6%, respectively. Microsoft dropped about 4.4%. Salesforce tumbled 7.1%. Apple sank close to 5.6%.
Etsy and eBay dropped 16.8% and 11.7%, respectively, after issuing weaker-than-expected revenue guidance. Shopify fell nearly 15% after missing estimates on the top and bottom lines.
On Wednesday, the Fed increased its benchmark interest rate by 50 basis points, as expected, and said it would begin reducing its balance sheet in June.
Hungary accuses Brussels of threatening EU unity with its plans to impose an embargo on Russian oil imports, saying Budapest would not support proposals that would undermine its energy security.
Prime minister Viktor Orbán told European Commission president Ursula von der Leyen in a letter reported by the Financial Times that Hungary was unable to support the EU’s latest sanctions plan “in its current form”.
“If the commission insists on the adoption of its proposal, it will have to bear full responsibility for a historical failure in the course of European integration,” Orbán said.
Landlocked Hungary, which relies heavily on Russian oil, and Slovakia would benefit from a longer phase-out period under the EU proposals. But the package still went far beyond the EU consensus, Orban wrote to von der Leyen.
Orbán said the sanctions would further elevate energy prices with no mitigating measures from the EU.
The commission held talks with Hungary on Thursday and EU diplomats remain hopeful that a deal can be reached within days, with possible concessions including EU money to build new infrastructure.
“They are tough negotiators but ultimately open to compromise,” said one. “We have already agreed five sanctions packages with Hungary.”
The EU has agreed to end imports of Russian coal but has so far refrained from a ban on Russian gas, with countries including Germany still heavily reliant on these supplies.
BoE rate
The Bank of England on Thursday raised interest rates 13 years' high.
In the expected move, policymakers voted for the fourth consecutive rate hike since December.
The Bank’s Monetary Policy Committee approved a 25-basis point increase by a majority of 6-3, taking the base interest rate up to 1%. The Bank said the members in the minority preferred to increase interest rates by 0.5 percentage points to 1.25%.
The Bank expects U.K. inflation to rise to roughly 10% this year as a result of the Russia-Ukraine war and lockdowns in China
Russian rouble strengthens
The Russian rouble briefly reached its highest level against the dollar since March 2020 on Thursday, supported by capital control.
The volatile currency hit a high of 65.31 per dollar in early trading on the Moscow Exchange.
The rouble has rallied in the past few weeks thanks to mandatory conversion of foreign currency by export-focused companies. Also, there has been weak demand for dollars and euros amid waning imports and restrictions on cross-border transactions.
Against the euro, the rouble was 1% stronger at 69.77 , hovering at levels last seen in February 2020.
US stocks
US stocks fell back sharply on Thursday in one of the worst days since 2020.
The Dow Jones Industrial Average lost 1,063 points, or 3.12%, to close at 32,997.97. The tech-heavy Nasdaq Composite fell 4.99% to finish at 12,317.69, its lowest closing level since November 2020. Both of those losses were the worst single-day drops since 2020.
The S&P 500 fell 3.56% to 4,146.87, marking its second worst day of the year.
Large tech stocks were under pressure, with Facebook-parent Meta Platforms and Amazon falling nearly 6.8% and 7.6%, respectively. Microsoft dropped about 4.4%. Salesforce tumbled 7.1%. Apple sank close to 5.6%.
Etsy and eBay dropped 16.8% and 11.7%, respectively, after issuing weaker-than-expected revenue guidance. Shopify fell nearly 15% after missing estimates on the top and bottom lines.
On Wednesday, the Fed increased its benchmark interest rate by 50 basis points, as expected, and said it would begin reducing its balance sheet in June.
