By Noah
Browning
LONDON (Reuters) - Trading in oil
futures is now as heavy as it was in the first months of the COVID-19 crisis,
according to market data and analysts, with oil bulls and bears rushing to
hedge against jolts in the steady rise of prices.
Oil futures have already recovered
to pre-pandemic levels, with Brent crude futures spiking $55 in less than a
year to $70 a barrel this week while actual fuel demand remains weak.
But speculation over when and if
people will begin to travel and commute as they once did is driving dueling
bets in the market and historic volumes of trade.
“What makes the current situation so
pronounced is ... the duration of uncertainty around how the resolution will
pan out,” said Marc Rowell, senior energy broker at Britannia Global Markets.
Total monthly contracts for U.S. WTI
crude held by producers and merchants increased to more than 1 million in February
for the first time since May, according to the U.S. Commodity Futures Trading
Commission.
Meanwhile, market open interest in
ICE’s Brent futures contract reached an all-time high of 2.8 million contracts
on Feb. 19, topping its last record in April last year.
---- Oil market participants engage in
futures trading to mitigate risks by price changes to their business -
producers generally use short positions to protect themselves from price
increases while consumers use longs to hedge against decreases.
The recent surge in oil prices
encouraged both producers and consumers to wade into the market with their
competing bets, the U.S. Energy Information Administration (EIA) said.
“The current prices provide an
incentive for crude oil producers to secure a contract rate based on present
highs,” the EIA wrote this week.
More
https://www.reuters.com/article/us-global-oil-hedging/oil-bears-and-bulls-grapple-as-market-puzzles-over-pandemic-exit-idUSKBN2B90EO
Finally, in banking
news, more fallout in Switzerland from the collapse of Greensill Capital.
NatWest’s honest
mistake? Or is it “a fair cop gov’ ".
Credit Suisse Flags Trading
Surge, Warns of Greensill Hit By Patrick
Winters 16 March 2021, 06:16 GMT Updated on 16 March 2021,
08:38 GMT
·
·
Credit Suisse Group AG said it recorded its best
start to a year in a decade before the implosion of Greensill Capital this
month pushed it into the deepest crisis since Chief Executive Officer Thomas
Gottstein took over.
Revenue at the securities unit rose more than 50% in the
first two months and pretax income for the group was the best in a decade, the
Swiss lender said Tuesday. The bank warned it may have to take a charge on
business related to Greensill Capital, including a loan it extended before the
firm filed for insolvency.
Gottstein is seeking to calm investors after the bank’s
decision to freeze $10 billion of funds it ran with Greensill sent shockwaves
across the globe. The CEO, who’s already had to contend with a series of
missteps and losses in his first year at the helm, is facing questions about
controls and risk management, not least because he ordered a review of the
funds just last year that subsequently failed to prevent their collapse.
Read
more: Credit Suisse Missed Many Warnings
Before Greensill ’s Collapse
“While these issues are still at an early stage, we would
note that it is possible that Credit Suisse will incur a charge in respect of
these matters,” the bank said ahead of a presentation Gottstein is scheduled to
deliver at the annual Morgan Stanley European Financials Conference.
Shares of Credit Suisse rose 1.6% as of 9:13 a.m. in
Zurich. The shares lost almost 9% this month before Tuesday, compared with a
small gain for UBS Group AG, its closest rival.
Credit Suisse said it recovered $50 million recently of a
$140 million loan it made to Greensill
Capital late last year that has added to questions about its risk-taking.
The bank brushed off concerns from some risk managers about the loan, which was
made just months before the firm’s collapse, people familiar with the matter
have said.
More damaging than the loan, however, is the decision to
freeze four funds that had been presented to investors as some of the safest in
the bank’s lineup. Credit Suisse said the money pools expect to return more
capital to investors in coming months, after paying out about $3.1 billion so
far.
More
https://www.bloomberg.com/news/articles/2021-03-16/credit-suisse-investment-bank-revenue-up-50-in-first-two-months?srnd=premium-europe
NatWest faces criminal action
over money laundering offences March
16, 2021 11:34 AM By Tom Wilson , Iain
Withers
LONDON (Reuters) - Britain’s
financial regulator has launched criminal action against NatWest over
allegations it failed to detect suspicious activity by a customer depositing
nearly 400 million pounds ($553 million) over five years, mostly in cash.
The case is the first criminal
action taken against a British bank under a 2007 money laundering law, carrying
a maximum penalty of an unlimited fine.
The Financial Conduct Authority
(FCA) said it was bringing the proceedings after NatWest’s systems failed to
adequately monitor and scrutinise activity over an account held by a UK
customer between November 2011 and October 2016.
Around 365 million pounds was paid
into the unnamed customer’s accounts, of which around 264 million pounds was in
cash, the watchdog alleged.
NatWest will appear in court on
April 14, the FCA said.
A source familiar with the matter
said the watchdog was keeping the possibility of charging individuals under
review.
NatWest had previously disclosed in
its 2020 annual report that it had been notified in July 2017 of an FCA
investigation under the money laundering law in relation to “certain money
service businesses and related parties”.
The FCA defines a money services
business as a company operating a bureau de change, transmitting money by any
means or cashing cheques payable to customers.
The case threatens NatWest with
further costs for past misdeeds at a time when it has been trying to clean up
its image under CEO Alison Rose, who took over in 2019.
The
bank - which remains 62% state-owned after a bailout in the 2007-09 financial
crisis - rebranded from the scandal-tainted Royal Bank of Scotland name last
year.
----
The bank said on Tuesday it was cooperating with the investigation.
More
https://www.reuters.com/article/us-natwest-regulator/natwest-faces-criminal-action-over-money-laundering-offences-idUSKBN2B81HN?il=0
“Young
man,” said the judge, looking sternly at the defendant. “It’s alcohol and
alcohol alone that’s responsible for your present sorry state!”
“I’m
glad to hear you say that,” replied Murphy, with a sigh of relief. Everybody
else says it’s all my fault!”
Covid-19 Corner This
section will continue until it becomes unneeded.
France Finds Covid-19 Variant
That Evades Gold-Standard Tests By Marthe
Fourcade 16
March 2021, 10:37 GMT
A
new Covid-19 variant is spreading in the French region of Brittany, where
several patients developed tell-tale symptoms but tested negative for the
virus.
Early analysis doesn’t suggest the mutated pathogen is more
contagious or causes more severe disease than other versions, France’s health
ministry said in a statement
late Monday. Experiments are underway to determine the variant’s response to
vaccination and antibodies from prior Covid infection, the ministry said.
A handful of patients whose infection was confirmed with
samples from blood or deep in the respiratory system had tested negative at
first with gold-standard tests, called PCR. Health authorities have increased surveillance
amid concern globally about other variants that can thwart vaccines, spread
quickly or foment worse symptoms.
The mutation was confirmed by sequencing in eight patients
within a cluster of 79 at the hospital in Lannion, in northwestern Brittany,
according to the statement.
https://www.bloomberg.com/news/articles/2021-03-16/france-finds-variant-in-brittany-that-evades-standard-tests
Exclusive:
Regular booster vaccines are the future in battle with COVID-19 virus, expert
says Guy Faulconbridge 15 March, 2021
CAMBRIDGE, England (Reuters) - Regular booster vaccines
against the novel coronavirus will be needed because of mutations that make it
more transmissible and better able to evade human immunity, the head of
Britain’s effort to sequence the virus’s genomes told Reuters.
The novel coronavirus, which has killed 2.65 million people
globally since it emerged in China in late 2019, mutates around once every two
weeks, slower than influenza or HIV, but enough to require tweaks to vaccines.
Sharon Peacock, who heads COVID-19 Genomics UK (COG-UK)
which has sequenced half of all the novel coronavirus genomes so far mapped
globally, said international cooperation was needed in the “cat and mouse”
battle with the virus
“We have to appreciate that we were always going to have to
have booster doses; immunity to coronavirus doesn’t last forever,” Peacock told
Reuters at the non-profit Wellcome Sanger Institute’s 55-acre campus outside
Cambridge.
“We already are tweaking the vaccines to deal with what the
virus is doing in terms of evolution - so there are variants arising that have
a combination of increased transmissibility and an ability to partially evade
our immune response,” she said.
Peacock said she was confident regular booster shots - such
as for influenza - would be needed to deal with future variants but that the
speed of vaccine innovation meant those shots could be developed at pace and
rolled out to the population.
COG-UK was set up by Peacock, a professor at Cambridge,
exactly a year ago with the help of the British’s government’s chief scientific
adviser, Patrick Vallance, as the virus spread across the globe to Britain.
The consortium of public health and academic institutions
is now the world’s deepest pool of knowledge about the virus’s genetics: At
sites across Britain, it has sequenced 346,713 genomes of the virus out of a
global effort of around 709,000 genomes.
---- Three main coronavirus variants - which were first
identified in Britain (known as B.1.1.7), Brazil (known as P1)and South Africa
(known as B.1.351) - are under particular scrutiny.
Peacock said she was most worried
about B.1.351.
“It is more transmissible, but it
also has a change in a gene mutation, which we refer to as E484K, which is
associated with reduced immunity - so our immunity is reduced against that
virus,” Peacock said.
With 120 million cases of COVID-19
around the world, it is getting hard to keep track of all the alphabet soup of
variants, so Peacock’s teams are thinking in terms of “constellations of
mutations.”
More
https://www.reuters.com/article/reutersComService_2_MOLT/idUSKBN2B70V2
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on Sme.sk and Korzar.sk Next, some vaccine links
kindly sent along from a LIR reader in Canada. The links come from a most
informative update from Stanford Hospital in California.
World
Health Organization - Landscape of COVID-19 candidate vaccines . https://www.who.int/publications/m/item/draft-landscape-of-covid-19-candidate-vaccines
NY
Times Coronavirus Vaccine Tracker . https://www.nytimes.com/interactive/2020/science/coronavirus-vaccine-tracker.html
Stanford
Website . https://racetoacure.stanford.edu/clinical-trials/132
Regulatory
Focus COVID-19 vaccine tracker . https://www.raps.org/news-and-articles/news-articles/2020/3/covid-19-vaccine-tracker
Some other useful Covid links.
Johns Hopkins Coronavirus resource
centre
https://coronavirus.jhu.edu/map.html
Rt Covid-19
https://rt.live/
Centers for Disease Control
Coronavirus
https://www.cdc.gov/coronavirus/2019-ncov/index.html
The Spectator
https://data.spectator.co.uk/city/national
Technology Update.
With events happening
fast in the development of solar power and graphene, I’ve added this section.
Updates as they get reported.
Tesla and Panasonic
get some competition in Europe. But where in Europe will BYD be bribed to go
and how much will it cost?
China's BYD hires engineers for
Europe EV battery plant March 17, 2021
3:34 AM
BEIJING (Reuters) - China’s electric
vehicle (EV) maker BYD is hiring engineers for its first overseas battery plant
in Europe, the company backed by Warren Buffett said on Wednesday, as it pushes
to become an EV parts supplier.
Batteries are key components of EVs.
BYD, based in the southern city of Shenzhen, which also makes semiconductors
for EVs, sold 426,972 vehicles last year, among them 189,689 EVs.
“The planning of the factory is to
prepare for supply to European automotive customers and to prepare for the
further expansion of BYD’s overseas business,” a BYD representative told
Reuters, without detailing location or manufacuturing capacity.
Chinese makers of EV batteries, including
CATL, are adding production facilities in Europe, where automakers from
Volkswagen AG to Daimler AG are expanding their lineups of electric vehicles.
https://www.reuters.com/article/us-byd-electric/chinas-byd-hires-engineers-for-europe-ev-battery-plant-idUSKBN2B90CM
Waiting for Godot play by Beckett adapted for the Federal Reserve. (With
apologies.)
The play consists of conversations between Powell and Yellen,
who are waiting for the arrival of the mysterious Greenspan, who continually
sends word that he will appear but who never does. They encounter Elon and Bezos,
they discuss their miseries and their lots in life, they consider hanging
themselves, and yet they wait. Often perceived as being frauds, Powell and Yellen
are a pair of human beings who do not know why they were put on earth; they
make the tenuous futile
https://www.britannica.com/topic/Waiting-for-Godot
Paddy drags a huge box to the Antiques Roadshow in
Dublin. ‘Where did you get this?’ asks the expert.
It’s been in my loft for over 40 years,’ replies
Paddy, ‘and I tink it must be some kind of a family heirloom.’ ‘I see,’ says
the expert. ‘Tell me, do you have home insurance?’‘
No,’ replies Paddy. ‘Do yus think I shud?’ ‘Yeah,’
replies the expert. ‘It’s your water tank.
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