Friday, March 20, 2015

Today's Headlines

  • Ukraine Rebels Plan Offensive as Government Fortifies Key Port. Pro-Russian rebels in eastern Ukraine are preparing for a new offensive to expand their territory, signaling a six-week-old truce is in danger of crumbling. “We’ll try to push them from here to hell because we’re tired of them killing civilians with indiscriminate fire,” Alexander Khodakovsky, who commands the 3,500-man Vostok Brigade, said in an interview at his headquarters in Donetsk. The campaign may start in the “foreseeable future,” according to Khodakovsky, who also heads the security council of the self-proclaimed Donetsk People’s Republic. A rebel offensive would shatter the cease-fire and raise the risk of escalating U.S. and European Union sanctions against Russia, which they blame for stoking the conflict. Ukraine and Germany, which brokered the accord with France, are calling for fresh talks as President Petro Poroshenko’s government and the insurgents accuse each other of violations. 
  • Worst Yet to Come for Russian Banks, Sberbank CEO Gref Says. OAO Sberbank Chief Executive Officer Herman Gref said the worst is yet to come for Russia’s banking industry still reeling from last year’s collapse of the ruble and the economic slump. Russia’s banking sector has not yet surpassed “the peak of its problems,” Gref, who runs the country’s largest lender, told reporters in Moscow on Friday. “They are still ahead.” 
  • EU Dangles Prospect of Aid to Entice Greece Into Action. Greece could win an infusion of bailout money as soon as next week if Prime Minister Alexis Tsipras can deliver an adequate package of reform measures, an EU official told reporters in Brussels. European Union leaders sought to revive bailout talks at a meeting in Brussels by signaling they might soon be ready to release some funds so long as Greece fulfills its commitments. The first money could come from profits euro members made when the European Central Bank bought discounted Greek debt during an earlier phase of the financial crisis. There’s also money left in the country’s 240 billion-euro ($258 billion) bailout program.
  • Suicide Bombs Hit Shiite Mosques in Yemen, 120 Reported Dead. Suicide bombers killed dozens of worshipers at two mosques in Yemen’s capital Sana’a during Friday prayers, a day after fighting spread to the south of the country. At least 120 people died in the attacks on the Badr and al-Hashoosh mosques, according to the al-Haris news service, run by the Interior Ministry. The mosques, like most of the capital, are controlled by the Shiite Houthi rebel movement, based in north Yemen, which has been battling forces loyal to President Abdurabuh Mansur Hadi as well as al-Qaeda militants.  
  • European Stocks Inch Toward Record as FTSE 100 Rises Above 7,000. European stocks rose near an all-time high as miners and oil shares led gains. The U.K.’s FTSE 100 Index climbed above 7,000 for the first time. The Stoxx Europe 600 Index advanced 0.8 percent to 404.01 at the close of trading. It is 0.4 percent away from a record close in March 2000, having surpassed the forecasts of 12 strategists surveyed by Bloomberg in January.
  • Here's the Next Biggest Threat to Global Crude Oil Prices. The next big threat to oil prices isn’t from OPEC or Bakken shale. It’s Russian samovars, or teapots. Simple refineries that process crude into fuel oil are scaling back, because when oil prices slump, the government reduces the discount that these refiners -- known as teapots to those in the industry -- get for exporting fuel. They use less crude, freeing it up for sale abroad, which in turn adds to the global glut. Russia may increase oil exports by as much as 250,000 barrels a day this year, according to James Henderson, a senior research fellow at the Oxford Institute for Energy Studies who’s followed the country’s energy industry for more than 20 years. That would equate to 5 percent growth in shipments, the most in at least a decade.  
  • Oil Rot Spreads as Loan Default Claim Puts Connacher on Brink. A New York lawsuit is threatening to make Connacher Oil and Gas Ltd. a casualty of crude’s collapse in Canada’s oil sands as creditors squeeze small producers in one of the priciest places to extract the fuel. As oil prices resumed their slide to a new six-year low this week, creditors filed suit on Monday demanding Connacher immediately repay a $128.4 million loan. If successful, the suit would make it difficult for the company to stay in business unless it finds some other source of capital, according to Moody’s Investors Service Inc.
  • European Coal Falls to Lowest Since 2007 as Demand Outlook Dims. European coal prices fell to the lowest in more than seven years amid a worldwide glut of the fuel as governments from the U.S. to China boost efforts to shift away from the most-polluting energy source. Prices for delivery next year to northwest Europe slid as much as 0.7 percent, according to broker data compiled by Bloomberg. The benchmark contract is headed for a third straight weekly decline as demand growth slows in China, the world’s biggest consumer. 
  • Iron Ore Slumps Below $55 as China Slowdown Hurts Outlook. Iron ore plunged below $55 a dry metric ton as signs of a slowdown in China’s economy added to concerns that demand will weaken from the largest buyer amid a global surplus. Ore with 62 percent content at Qingdao, China, sank to $54.66 a ton on Friday, according to Metal Bulletin Ltd. That’s the lowest since at least May 2008, when Metal Bulletin started compiling weekly prices. Prices retreated 5.2 percent this week, extending losses in 2015 to 23 percent.
  • Tiffany(TIF) Predicts Profit Plunge as Strong Dollar Crimps Sales. (video) Tiffany & Co., the world’s second-largest luxury jewelry chain, predicted a 30 percent decline in net income this quarter as currency headwinds and sluggish sales hamper results. The drop in the first quarter will be followed by a more “modest” decrease in the following period, the New York-based company said in a statement on Friday. Worldwide sales will decline about 10 percent in the first quarter, partly because of a slowdown in the Americas region, Tiffany said. The stronger dollar has hit Tiffany with a double-whammy by lowering the value of overseas sales and making it less attractive for foreign tourists to come to the U.S. to shop.
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