By Geoffrey Smith and Ana Beatriz Bartolo
Investing.com – Elon Musk suspends his offer on Twitter, due to due diligence reasons. Financing issues may also be behind the ad. Cryptocurrencies rally as the weather resists an intense demand for ransoms. US equities and risk assets in general are also set to open higher, but are still on track for a week of losses. New data shows the scale of China’s economic slowdown in April and G7 ministers meet to discuss increased pressure on Russia. Bolsonaro wants to sue Petrobras (SA:).
Here’s what you need to know in the financial markets on Friday, May 13th.
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1. Encryption rebound
Cryptocurrencies have surged wildly as the panic sparked by the collapse of the TerraUSD algorithmic stablecoin and its LUNA token has faded.
Confidence returned as the world’s largest stablecoin network, Tether, successfully negotiated a period of intense demand for ransoms as cryptocurrency holders rushed to convert their assets back into dollars or other fiat currency. Unlike TerraUSD, Tether is backed by real assets, more than 40% of which are high-liquidity and risk-free Treasury bills.
Tether has resumed trading around its 1:1 peg with early European trading. The was up as much as 13% before slashing its earnings to 6.8% at $30,495.1 at 8:09 am. However, it was still down around 16% on the week after a few rough days for risky assets across the board.
The TerraUSD network attempted to resume trading overnight, but quickly closed again.
2. Bolsonaro against Petrobras
In the quest to control fuel prices, President Jair Bolsonaro said he will go to court against Petrobras, even though he recognizes that he has little chance of winning in this clash.
The president says that he will not interfere in the state-owned company, but that he intends to find a way to force the company to “fulfill its social role defined in the Constitution” and that “it cannot be subordinated to the decisions of the Council”.
Yesterday, the 12th, Bolsonaro said that he hopes to “make changes in people” to “reduce the price of fuel in Brazil.” In addition to the fall of former Minister of Mines and Energy, Bento Albuquerque, the president of Petrobras was replaced twice during the Bolsonaro’s term.
The offensive against Petrobras may also result in the resumption of old questioning of alleged anti-competitive practices by the Administrative Council for Economic Defense (Cade). In response, the state-owned company stated in a material fact released yesterday that it “has no knowledge of findings of economic infractions” in the ongoing processes at CADE.
At 8:10 am, the EWZ ETF was up 3.83%, at US$ 32.28, in the premarket, while in Brazil, investors await the release of the , at 9 am.
3. US stocks set to open higher
US stocks are expected to open higher later at the end of a volatile week. Sentiment improved later in the day on Thursday, when the president of the , , again backed off against the idea of raising key interest rates by 75 basis points at the next central bank’s monetary policy meeting.
At 8:12 a.m., 100 futures were up 1.71%, while A and A were down 1.12% and 0.76%, respectively.
Stocks likely to be in focus later include chipmakers, after Bloomberg reported that industry leader Samsung (KS:) is looking to boost its semiconductor prices by 20%, while Duolingo shares are up 17%. in the premarket after its quarterly update.
Also due on Friday is Jessica Alba’s Honest Company, while Honda’s (TYO:) ADRs rose 3.9% after the Japanese auto giant posted better-than-expected results.
In addition, Elon Musk said that his offer for Twitter is “temporarily on hold.” Tesla (NASDAQ:) (SA:) CEO said the move was in response to a filing by the Twitter Inc (NYSE:) (SA:) on Thursday that claimed that less than 5% of accounts on its network are spam bots or vehicles for fake news. Musk indicated that he thinks the ratio is much higher and has made removing them a top priority of his.
However, the arithmetic behind Musk’s leveraged buyout offer has become more complicated as the value of his Tesla shares has dropped about 16% in the last week, even as it racks up nearly 30% higher this year. Musk was supposed to borrow about $12 billion against his equity stake through a margin loan under the original terms of the deal.
Twitter shares are down more than 20% premarket in response to the news, while Tesla shares are up 4.8% as the risk of a significant stock glut eased.
4. Chinese loan growth slows sharply
Credit growth in China slowed sharply in April under the impact of the spread of lockdowns to stop the spread of Covid-19. These affected nearly 400 million people during the month, according to some estimates, including Shanghai’s main economic hub, much of which remains under severe restrictions.
New borrowing fell from more than 3.1 billion yuan in March to 645 billion yuan in April, while the broader credit aggregate known as Total Social Financing also fell to its slowest growth since the start of the pandemic. The data underscores the scale of the slowdown in China, where surveys indicate that both manufacturing and services activity fell in the past month.
The lockdowns are doing nothing to help the country’s homebuilders’ balance sheets: Shimao, one of the biggest, said its April pre-sales were down 76% from a year earlier, a stark illustration of how the industry’s ability to meet your debt is deteriorating.
5. Oil rises further amid fears of falling Russian production
Crude prices extended Thursday’s gains as G7 foreign ministers met to coordinate increased diplomatic and economic pressure on Russia to abandon its faltering invasion of Ukraine.
As of 8:17 am, U.S. crude oil futures were up 1.71% at $107.95 a barrel, while U.S. oil futures were up 1.80% at $109.38.
The International Energy Agency estimated on Thursday that Russia’s oil production could fall to about 1.6 million barrels a day below pre-war levels by June, due to difficulties in reorganizing much of its oil trade. oil exports due to western sanctions.
Baker Hughes rig count and CFTC net positioning data are due later.
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