Oil at $75, Trump-Abe, Ramaphosa’s blueprint

FT subscribers can click here to receive FirstFT every day by email

How good is your grasp of the news? Try our weekly FirstFT quiz

Oil prices climbed towards $75 a barrel on Thursday, hitting the highest level since 2014 and taking the rally over the past year to almost 50 per cent, with traders pointing to tightening supplies at a time when political risks to the market are mounting. The rise in price, which has spurred a sharp rally in energy shares, follows 16 months of supply cuts by Opec and Russia that have removed at least 1.8m barrels a day from the market. 

That has mopped up the worst of the oil glut that hammered prices four years ago, with Saudi Arabia, Opec’s de facto leader, showing little sign of moving to cool the rally as it tries to fund an ambitious — and expensive — programme of economic and social reform. But the latest leg-up over the past two weeks has largely reflected rising political risk, traders say. Tighter supplies in the market increase the importance of production threats, ranging from Venezuela’s economic collapse to the risk of the US reimposing sanctions on Iran’s oil exports. (FT)

In the news

Trump-Abe summit
After two days of discussions — and a round of golf — at Donald Trump’s Mar-a-Lago resort, the US president and Japan’s Shinzo Abe have united on North Korea. But they are struggling to find common ground on trade, with Mr Trump saying the US will leave in place tariffs on imports of Japanese steel. Here’s our Asia editor on why Mr Trump’s short-sighted mistreatment of Japan, an indispensable ally, will have consequences. In another trade twist, US chipmaker Qualcomm will have to make further concessions over market competition to win Beijing’s approval for its proposed $44bn purchase of Dutch company NXP Semiconductors. (Nikkei Asian Review, FT)

North Korea has no set terms for de-nuclearisation
North Korea is no longer demanding the removal of US troops from South Korea in return for “complete de-nuclearisation”, according to South Korea’s president Moon Jae-in, easing concerns that Pyongyang may demand excessive concessions from Seoul and Washington in its upcoming summits. (FT)

Shire rejects Takeda takeover
Irish drugmaker Shire has rejected a revised £42.4bn takeover offer from Japanese rival Takeda, which said on Thursday that the two sides remained in talks over a potential deal. Takeda said it had offered £46.50 per share to the London-listed company on April 12, comprising £17.75 in cash and £28.75 of new Takeda shares, in what would be the largest outbound deal by a Japanese company. (FT)

Betting on more Fed rate rises
Investors have sharply increased their expectations that the Federal Reserve will raise interest rates three or possibly four times this year, even as yields on long-term bonds showed concerns about growth. The probability that the Fed will raise rates three more times in 2018, derived from prices in futures markets, rose above 80 per cent on Wednesday, up from 66.3 per cent a week ago. (FT)

Banks look to the stars
The European Space agency is working with the financial services industry to stop trading mistakes. Yes, you read that correctly. The machine-learning technology that safeguards Europe’s deep-space missions could soon be used to reduce the risk of “fat finger” trades. (FT)

Australia’s Great Barrier Reef cooked alive
Almost a third of coral on the world’s largest reef system died during bleaching events between March and November 2016, a study shows. In some cases, corals were “cooked” and died almost immediately. In response, scientists are developing new technologies aimed at saving endangered reefs, with Google among the corporate and philanthropic donors supporting trials. (FT)

How good is your grasp of the news? Try our weekly FirstFT quizWhat is the title of former FBI director James Comey’s book?

The day ahead

P&G reports
Procter & Gamble, the world’s biggest household products maker, is expected to report a higher profit in the third quarter, driven by higher sales of innovative products and a strong beauty products business. Profit margins, which were weighed down last quarter by higher commodity costs and investments, will be closely watched. 

GE reports
First-quarter revenue and profit are expected to fall when General Electric reports first-quarter earnings. Its power business, a unit that produced 60 per cent of its profits as recently as 2016, continues to underperform. The results follow a sharp decline in 2017 profit, which have just been revised to take account of a new tax charge. 

What we’re reading

Ramaphosa’s blueprint
Cyril Ramaphosa, South Africa’s new president, has laid out an ambitious business-centred strategy to resurrect the stuttering economy. “We are not going to go for a smash-and-grab. We are seeking to create a very good, solid and durable environment for investment,” he said, in an interview with the FT (FT)

The UK refused to raid a company with Tory ties
In part five of an ongoing series, BuzzFeed digs into the saga of UK telecoms giant Lycamobile — British authorities refused to assist a French investigation into suspected money laundering and tax fraud by the company, citing the fact that it is the “biggest corporate donor to the Conservative party”. (BuzzFeed)

Inside Rex Tillerson’s ouster
Journalist Ronan Farrow goes inside the last days of the demoralising and chaotic tenure as secretary of state of the former ExxonMobil chief. (New Yorker)

Palantir knows everything about you
Forget Facebook. Peter Thiel’s data-mining company is using War on Terror tactics to track American citizens. (Bloomberg BusinessWeek)

The roots of American gun culture
They’re in 18th-century Britain, according to Stanford history professor Priya Satia, whose book tracks how the slave trade and the Revolutionary War contributed to America’s mass shooting epidemic. (Slate) 

The radical makeover of Goldman Sachs
The famously buttoned-up Wall Street bank is looking for talent in unusual places as it pushes into lending to offset weakness in its core business of trading. The gambit could go either way. If Goldman gets it wrong, it could be saddled with big losses and punished for going big on credit at the top of the cycle. (FT)

China’s sleeper cells
Communist party cells are appearing at universities around the world, but particularly in the US. The cells appear to be part of a strategy, now expanded under China’s President Xi Jinping, to globally extend direct party control and to insulate students and scholars abroad from the influence of “harmful ideology”. Sometimes this happens by asking members to report on each other’s behaviours and beliefs. (Foreign Policy)

Video of the day

Commodities traders turn to tech
Several of the world’s leading commodities houses explain how they’re using technology, including blockchain, to leverage their data and increase efficiency. (FT)

Source link

Please wait...

Subscribe to our newsletter

Want to be notified when our article is published? Enter your email address and name below to be the first to know.
Translate »