Seeking peace in Ukraine
Costly energy threatens a German factory exodus
Xi and Putin are coming to Bali
UK consumer confidence plunged
Turkish President Recep Tayyip Erdogan said he discussed avenues to end Russia’s war during talks with his Ukrainian counterpart, as well as conditions for a possible prisoner exchange. The comments came after the Turkish leader met in the western Ukrainian city of Lviv with President Volodymyr Zelenskiy and United Nations Secretary General Antonio Guterres on Thursday. Erdogan said he would follow up on the discussions with Russian President Vladimir Putin, whom he met two weeks ago. Erdogan has pushed for a mediating role as Russia’s invasions grinds on. Meanwhile, European intelligence officials said Russia is likely using the Zaporizhzhia nuclear power plant in southern Ukraine to shield its troops and equipment, undermining the safety of the plant’s operations.
Europe’s industrial heartland faces a potential exodus as manufacturers of German car parts, chemicals and steel struggle to absorb power prices that rocket to new highs almost every day. Power and gas prices in Germany more than doubled in just two months, with year-ahead electricity — a benchmark for the continent — soaring past 540 euros ($545) per megawatt hour. Two years ago, it was 40 euros. The nation relied on gas from Russia to fuel its power plants and factories, but now it’s preparing for an unprecedented challenge to keep lights on and businesses running after Russia slashed those flows.
Chinese President Xi Jinping and Russian leader Vladimir Putin are both planning to attend a Group of 20 summit in the resort island of Bali later this year, Indonesian President Joko Widodo said. It was the first time the leader of the world’s fourth-most populous nation confirmed both of them were planning to show up at the November summit. The presence of Xi and Putin at the meeting would set up a showdown with US President Joe Biden and other democratic leaders, all of whom are set to meet in person for the first time since Russia’s invasion of Ukraine. The attack, which came shortly after Putin and Xi declared a “no limits” partnership, has left the G-20 divided over whether to place sanctions on Russia.
UK consumer confidence fell to a record low as concerns about a recession increased and soaring inflation tightened a squeeze on household finances. GfK said its gauge of confidence declined three points to minus 44 in August, the lowest since records started in 1974, and all other measures fell. The figures reflect a year-long surge in inflation, which hit a four-decade high of 10.1% last month. The Bank of England expects prices growth to top 13% in the coming months, sharpening the pain for consumers whose real wages are falling at a record pace.
European stocks are on track for a soft start after Asian shares fell, with investors digesting hawkish signals from Fed officials. Later today, a $2 trillion options expiration could stir volatility. Expected data include UK retail sales and Germany producer price inflation. Kingspan, Deere and Foot Locker are among companies scheduled to report earnings.
(Source: Bloomberg, August 19-2022)