- Putin Sanctions Drive Away Banks as Loans Dry Up. Lending to Russian companies reached a crescendo last year, with international banks pledging $31 billion to OAO Rosneft to buy TNK-BP. As sanctions are tightened against the nation, even the smallest deals have dried up. No Russian companies received loans in U.S. dollars, Swiss francs or euros last month, the first time this has happened in at least five years, according to data compiled by Bloomberg. Global banks fell away in the second quarter, with lending plunging 42 percent from a year earlier to $4.7 billion as the Ukraine conflict worsened after President Vladimir Putin annexed Crimea in March. That was the least for any quarter since 2012.
- Libya House Meets as Egypt Sounds Alarm on Growing Mayhem. Libya’s newly elected legislature met for the handover from its predecessor body, a transition marred by militia fighting that has left scores dead, sent foreigners fleeing and pushed the country deeper into chaos. Lawmakers from the House of Representatives, meeting today amid high security, took over from the General National Congress against a backdrop of unrest unseen since the 2011 ouster and killing of Muammar Qaddafi.
- European Stocks Fall for a Fourth Day as Nestle Retreats. European equities declined for a fourth day as the region’s two largest stocks retreated, outweighing reduced concern about the region’s most indebted lenders after Portugal bailed out Banco Espirito Santo SA. Nestle SA and Novartis AG both dropped more than 1 percent. Immofinanz AG slid 2.7 percent after the Austrian property developer reported annual profit that missed projections and said a delay in the construction of a Moscow shopping center hurt rental income. Banco Comercial Portugues SA rallied 6.1 percent. HSBC Holdings Plc gained after reporting lower provisions for bad debt in the first half. The Stoxx Europe 600 Index lost 0.2 percent to 331.15 at the close of trading, the lowest level since April 16.
- Euro Seen Vulnerable as Blowback From Sanctions on Russia Bites. “The euro area is going to underperform for a long time,” said Marvin Barth, head of European foreign-exchange strategy at Barclays in London. “Russian sanctions reinforce that picture and may increase the speed with which that happens.”
- Lacker Says Markets May Be Surprised by Pace of Rate Rise. Investors may be underestimating the pace at which the Federal Reserve will raise interest rates over the next two years, said Jeffrey Lacker, president of the Federal Reserve Bank of Richmond. Short-term interest-rate markets have for months priced in a slower tempo of increases than policy makers themselves forecast. That’s risky because the misalignment, a bet against a rate path that the central bank alone controls, could lead to volatility if traders have to adjust rapidly, Lacker said. “When there is that kind of gap, it gets your attention,” Lacker, a consistent critic of the Fed’s record easing who votes on policy next year, said in an Aug. 1 interview at his Richmond office overlooking the James River. “It wouldn’t be good for it to be closed with great rapidity.”
- Fed Says U.S. Banks Eased Loans Amid Broad Pickup in Demand. “Survey results showed a continued easing of lending standards and terms for many types of loan categories amid a broad-based pickup in loan demand,” the Fed said today in Washington in its quarterly survey of senior loan officers.
- Russia Launches Massive Bomber, Warplane Drill On Ukraine Border As Over 400 Ukraine Soldiers Defect.
Telegraph:
Le Monde:
- France's Hollande Sees Real Risk of Europe Deflation. The "real risk of deflation" could have "negative budgetary consequences, both for revenue and for debt," French President Francois Hollande said. Much will depend on euro's exchange rate "which has declined these past few days, but not enough," he said.
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