Hello. More and more signs point to a Russian default, but Russia doesn’t seem to agree with that. Additionally, Fed Chairman Powell has signaled that more aggressive central bank action may be on the horizon.
Let’s break it down.
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1. Russia faces an impending debt crisis. And Goldman Sachs has weighed in on the dilemma, lowering the country’s sovereign risk score – meaning the bank thinks the country is less likely to pay its debts.
“In our view, this reflects the technical nature of Russia’s debt servicing issues, which we believe are far removed from underlying credit dynamics,” the analysts said. But the Wall Street bank also pointed out that the war is damaging Russia’s credit fundamentals, but it would otherwise have a better rating.
Moscow, meanwhile, tried to reassure the market. On Thursday, Russia’s central bank governor said the country was not at risk of defaulting on its debt. The Kremlin, explained Elvira Nabiullina, has all the “necessary financial resources” to avoid it.
But earlier this week, an industry watchdog deemed Russia’s attempt to pay two of its dollar obligations in rubles a potential default scenario. Additionally, Russia’s second-largest bank, VTB, took a big step toward default on Wednesday by paying holders of its dollar bonds in roubles.
The lender was due to pay $52 million in interest on dollar-denominated bonds, but failed to do so. The bank said it had no choice, as it was “completely cut off from the foreign US dollar payment infrastructure”.
In other news:
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3. Earnings on deck: Verizon, American Express and Volvo, all declaring.
4. Jefferies said an immediate recession is unlikely and some stocks will be put in place for gains. With households and businesses brimming with cash more than ever, the chief business economist doesn’t expect a downturn until 2024 at the earliest. Here are 37 stocks to buy now.
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platform continues to fall even though it pioneered the field for years. Find out why a researcher said the stock was down another 33% more.
6. Fed Chairman Powell said a double rate hike was “on the table” in May. The central bank could pick up the pace from a 0.25 percentage point hike and hike 0.5 points instead. It would make mortgages, car loans and credit card interest even more expensive.
7. Foreign investors sold a record $18 billion of Chinese debt last month. The surge in yields made US bonds more attractive, with 10- and 30-year debt both hitting multi-year highs. Here’s what you want to know.
8. Binance crypto exchange limits services in Russia. The move comes as the company aims to comply with EU sanctions related to the war in Ukraine. “We believe that all other major exchanges must follow the same rules soon,” the company’s CEO said.
9. The head of research for an $800 million crypto asset manager explains how she performs due diligence on tokens before picking winning bets. Arca’s Katie Talati leads a team of analysts to combine fundamental analysis with VC-style investing. She also laid out her bullish case for three DeFi tokens with long-term potential.
10. The United States is building more homes than it has built in 16 years. Housing starts hit an annual rate of 1.79 million in March, according to new data from the Commerce Department. The reading signals that domestic supply could rebound soon after hitting historic lows during the pandemic.
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