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Emerging Markets Daily - October 20
Iraq Oil Minister Sees $100 Oil, Bitcoin Hits New Peak, CME Says Global Inflation Looms, Brazil Panel Targets Bolsonaro, Erdogan Drums Up Africa Business
The Top 5 Stories Shaping Emerging Markets from Global Media - October 20
Iraq Oil Minister Is Latest to Predict $100 Oil
“Add Iraq’s oil minister to the list of people discussing oil hitting $100 a barrel again.”
“Crude prices could hit triple digits for the first time since 2014 in the first half of next year, Ihsan Abdul Jabbar, the oil minister of OPEC’s second-largest producer, said at an event in Baghdad on Wednesday. Russia’s president Vladimir Putin said earlier this month that it’s ‘quite possible’ they will hit $100, while the boss of trading giant Mercuria Energy Group Ltd. said on Monday prices could reach that level this winter.”
“The talk comes as global oil inventories continue to decline, with analysts forecasting stock draws of about a million barrels a day in the fourth quarter. High natural gas prices are firing up demand, and the Organization of Petroleum Exporting Countries is only drip-feeding extra supply back to the market, leaving some market watchers concerned that prices could spike if the northern-hemisphere winter is cold.” Bloomberg reports.
Bitcoin Rallies to Fresh Peak Above $67,000 After ETF Launch
“Bitcoin has rallied to a record high a day after a bitcoin exchange traded fund launched on Wall Street for the first time, garnering strong demand in a sign of the booming investor interest in the asset class.”
“The digital coin struck a high of $67,016, surpassing its April peak, following the debut on Tuesday of the ProShares Bitcoin Strategy ETF on the New York Stock Exchange…”
“The approval of the ProShares ETF, which holds futures tracking the price of bitcoin, opened the floodgates to other filings. Investment manager VanEck applied on Wednesday for a futures-based fund, while Grayscale, the largest digital asset manager with $38bn of bitcoin under management, filed to convert its holdings into an ETF backed by outright holdings of digital tokens.”
“Markets cheered the launch and subsequent applications because the new vehicles could draw in more investors. Andrea Filtri, co-head of European equity research at Italian investment bank Mediobanca, said that the fund would ‘allow for a much broader reach [for] the cryptocurrency as ETFs are regulated assets’, adding that financial advisers could now more easily add crypto exposure to client portfolios.” The FT reports.
CME Group Says Global Inflation Looms
South China Morning Post
“CME Group, the world’s largest futures exchange operator, said rising coal and natural gas prices are expected to have a profound impact on consumers, as higher energy bills and manufacturing costs push inflation rates higher globally. The elevated prices of coal and gas will also hasten the shift towards renewable energy.”
“Supply chain bottlenecks and rising energy costs have kept the US headline inflation rate at more than 5 per cent for four straight months, but it could soon be a global phenomenon, according to Erik Norland, executive director and senior economist at CME Group.”
“‘The risk over the next few months is that the inflation that we’ve seen rising in the United States might begin to rise in other countries,’ said Norland during a media briefing on Tuesday.” SCMP reports.
Brazilian Panel Recommends Criminal Charges Against Bolsonaro
Wall Street Journal
“A Brazilian senate investigation into President Jair Bolsonaro recommended Wednesday that the ex-army captain face criminal charges over his handling of the pandemic, alleging he let Covid-19 rage freely in the country to test out herd immunity.”
“The accusations are unlikely to reach the courts, political and legal experts said, but the probe has already taken a political toll on Mr. Bolsonaro’s administration.”
“The 11-member panel of senators, most of whom belong to parties that oppose the president, released a report Wednesday summarizing their findings from the six-month congressional inquiry that has gripped the nation.”
“The panel, which called on witnesses ranging from doctors to businessmen, said Mr. Bolsonaro should be charged with crimes against humanity, failing to prevent deaths from an epidemic and misuse of public funds among several other lesser crimes. They accused Mr. Bolsonaro, a vocal critic of social-distancing measures and face masks, of carrying out a secret plan in which as many Brazilians as possible became infected with Covid-19 to increase the country’s levels of natural immunity against the virus.” WSJ reports.
Erdogan Eyes Business on Africa Tour Ahead of Istanbul Forum
“Turkish President Recep Tayyip Erdogan kicked off a whistle-stop tour of African countries on Monday, meeting leaders and investors in Angola, Nigeria and Togo ahead of a Turkey-Africa trade summit on Thursday.”
“The Turkey-Africa Economic and Business Forum, held in Istanbul from 21-22 October, aims to provide a platform for Turkish businesses to gain a foothold on the continent.”
“Organised by the Turkish government and African Union, Rwakakamba Morrison, the chairman of Uganda’s Investment Authority called it an opportunity to “catch up with prospective investors here in Istanbul.”
“The first day of the two day summit will see Turkish and African ministers of trade, investment, technology and logistics hold closed door meetings on ‘Deepening Turkey-Africa Partnership’.”
“The agenda for day one also schedules bilateral meetings with business leaders and ministers, as well as panel discussions on emerging opportunities in agriculture, healthcare and the new regional free-trade zone – the African Continental Free Trade Area (AfCFTA).” Shoshana Kedem reports.
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