Economy

Currency market
ECB top criticises US for unexpected euro move

The US sold euros instead of dollars to support the Japanese yen this summer – a departure from long-standing practice that ECB member Joachim Nagel is now criticising, writes Bloomberg.

– It would of course have been desirable [...] to coordinate and consult in advance about such interventions, he says at the G20 meeting in North Carolina.

According to Nagel, the issue was discussed at the meeting and the participants understood the euro countries' dissatisfaction. Next time he expects coordination in advance.

The last time the US and Japan intervened in the yen was in 2011, when the G7 countries jointly weakened the Japanese currency.

Tech companies' AI race
Central bank governor warns G20: AI boom could slow down the economy

Britain's central bank governor Andrew Bailey warns G20 countries that investments in AI make the market vulnerable to a crash, reports the BBC.

He says that if the growth of AI companies stops, it could lead to a market freeze that spreads globally. High stock market valuations, increased leverage and lower risk spread to a few tech giants have made the economy more fragile.

– In particular, the increasing cross-investments between AI companies could amplify a future downturn, says Bailey according to the BBC.

Middle East crisis  Stock market sentiment
Interest rates are soaring: “Vicious spiral – no relief in sight”

Investors are dumping global government bonds and sending market rates up. British borrowing costs are now the highest since the 2008 financial crisis and in Japan since the 1990s, notes the Financial Times.

The escalation in the Middle East is increasing concerns that inflation will force central banks to raise interest rates more quickly.

Royal London’s fixed income chief Craig Inches describes the bond market as “a vicious spiral” with no relief in sight.

– The conflict is not going away, interest rates have to price in greater uncertainty at the same time as governments still have large borrowing needs, he tells the FT.

Miller Tabak's Matt Maley notes that the stock market has so far ignored the rise in interest rates.

– But as we have seen before, higher interest rates do not matter for stocks – until they suddenly do, he tells Bloomberg.

US attack on Venezuela Oil market
Sources: Chevron secures new oil fields in Venezuela

Chevron is close to a deal that will greatly expand the US oil giant's operations in Venezuela, sources tell Bloomberg. The company is said to be getting rights to operate two large oil fields in the Orinoco belt.

The deal is expected to be the largest of several agreements as the Trump administration tries to step up US investment and oil production in Venezuela.

Chevron has also negotiated with Venezuela's acting president Delcy Rodríguez about new tax terms that could pave the way for more investment in the country, the news agency writes.

Swedish business
Kinnevik's largest holding is being sued in the US

Investment company Kinnevik's largest holding Spring Health is in a legal dispute in the US, reports EFN. A former employee sued the digital healthcare company this summer and is demanding compensation for alleged systematic violations of California labor law. The person also wants to pursue the case as a class action.

Spring Health denies the allegations. Kinnevik's head of communications Hannah Björk writes to EFN that the legal process does not affect the investment company's investment.

Spring Health accounts for 16.5 percent of the net asset value in Kinnevik's portfolio.