Despite a moratorium on attacking energy facilities, Russia claimed on Friday that Ukraine had struck a gas infrastructure unit in the town of Sudzha. 

Russia accused Ukraine of violating the moratorium and reserved the right to retaliate against such attacks in the future, according to a Reuters report.

According to the report, an Ukrainian official blamed the Kremlin for the attack, while the Ukrainian military said Kyiv “strictly adheres” to the moratorium. 

Agreement with the US

The United States government has taken a significant step towards de-escalating the ongoing conflict between Ukraine and Russia. 

On Tuesday, the US reached separate agreements with both nations, aimed at halting hostilities in the Black Sea and preventing attacks on each other’s energy infrastructure. 

These agreements represent potential stepping stones towards a broader ceasefire and, ultimately, comprehensive peace talks to end the three-year war that has ravaged the region.

The agreement with Ukraine focuses on pausing military strikes in the Black Sea, a crucial maritime region that has witnessed numerous clashes between the two nations’ naval forces. 

By de-escalating tensions in this area, the US hopes to create a more conducive environment for future negotiations and reduce the risk of further military escalation.

Simultaneously, the agreement with Russia aims to prevent attacks on Ukraine’s energy targets, which have been a recurring feature of the conflict. 

These attacks have caused significant damage to Ukraine’s power grid and disrupted essential services for civilians. 

By halting such strikes, the US seeks to alleviate humanitarian suffering and demonstrate goodwill towards both sides.

Challenges remain

While these agreements represent a positive development, they are not a guarantee of lasting peace. 

The US acknowledges that these are merely initial steps and that much work remains to be done to achieve a full ceasefire and initiate peace talks. 

However, the U.S.-brokered agreements were fragile, as evidenced by both sides accusing each other of violating the energy truce on Friday. 

Ukraine’s general staff reported that Russia attacked energy facilities in the Kherson and Poltava regions in the past day.

The gas metering station at Sudzha, located in Russia’s western Kursk region, was the transit point for Russian gas piped through Ukraine to Europe until the end of last year.

The agreement was halted on January 1 due to Ukraine’s refusal to renew it amidst the ongoing conflict, which began in February 2022 when Russia had invaded Ukraine.

Kremlin accuses Ukraine of continuous attacks

Kremlin spokesman Dmitry Peskov stated during a Friday conference call with reporters that Ukraine was continuing to strike Russian energy facilities.

Peskov said:

The Russian side reserves the right, in case the Kyiv regime fails to observe the moratorium, not to observe it either.

The Sudzha facility would need to be rebuilt before Russia could once again export gas to Europe through Ukraine. However, the necessary pipeline infrastructure remains in place.

Gas also flows through Sokhranovka, located in the Luhansk region of Ukraine, which has been partially controlled by Russia-backed separatists since 2014.

However, Ukraine declared “force majeure” on gas flows via Sokhranovka in May 2022, claiming it was “occupied.”

The Russian defense ministry reported that the Kyiv regime launched a double attack using HIMARS missiles at the Sudzha gas metering station on March 28, causing a major fire and virtually destroying the energy facility.

The post Sudzha gas facility attack threatens Russia-Ukraine energy agreements appeared first on Invezz

Taiwan Semiconductor Manufacturing Co. (TSMC) has faced a difficult year, with its stock declining 15% amid growing concerns over potential US tariffs on semiconductor imports and its substantial investment in the United States.

The chipmaker, a key supplier for companies such as Apple and Nvidia, has committed $165 billion to US expansion, but it remains uncertain whether it would receive an exemption from any potential tariffs imposed by a future Trump administration.

Investor sentiment has also been affected by a broader market shift away from stocks tied to artificial intelligence (AI), which had driven semiconductor shares to record highs in 2023.

This combination of political uncertainty and sector rotation has weighed on TSMC’s performance.

However, analysts at JPMorgan remain optimistic about the company’s resilience and market position.

Despite ongoing uncertainties, Hariharan reaffirmed an Overweight rating on TSMC stock, maintaining a price target of 1,500 New Taiwan dollars (NT$).

Tariffs to have limited impact on TSMC’s earnings: JPMorgan

J.P. Morgan analyst Gokul Hariharan downplayed the risk of tariffs significantly affecting TSMC’s earnings, stating that the majority of the company’s exports are directed to regions outside the United States.

“We believe that a reciprocal tariff on direct Taiwan exports into the US is unlikely to have much effect on TSMC, given most of the exports are to other regions. The key impact would be if the US were to impose [an] indirect tariff on semiconductors coming from Taiwan as a part of goods imported into the US,” Hariharan said in a research note.

Even in a worst-case scenario, Hariharan believes TSMC has enough pricing power to adjust its costs accordingly, mitigating any negative impact on earnings.

Additionally, he suggested that the company’s commitment to expanding US manufacturing could make it less vulnerable to sector-specific tariffs.

No role in Intel rescue plan, says JPMorgan

Another major question surrounding TSMC in recent weeks has been whether it might play a role in rescuing Intel’s struggling foundry business.

Reports suggested that TSMC had explored the possibility of a joint venture with Nvidia and Broadcom to take over some of Intel’s chip-making operations.

However, JPMorgan believes this scenario is unlikely.

Hariharan stated that TSMC would only enter into such an arrangement under “very extenuating circumstances” or if there were “very lucrative financial rewards.”

This presents a double-edged scenario for Intel—while it dampens hopes for an immediate cash injection, investors optimistic about the stock may welcome the company’s continued control over its foundry operations.

Intel has been working to regain its position as a leading semiconductor manufacturer, touting its 18A process as a major breakthrough.

However, JPMorgan sees Intel continuing to rely on TSMC for chip production due to delays in mass manufacturing of the 18A process.

The stock closed 0.6% lower at NT$952 in Taiwan on Friday, while its ADRs edged up 0.1% in premarket trading.

The post TSMC stock under pressure from tariff concerns, but analysts stay bullish appeared first on Invezz

The current US economic landscape is characterised by rising inflation and a decrease in consumer spending. 

These existing trends are likely to be exacerbated by the implementation of protectionist US policies. 

Analysts at ING Group believe that US President Donald Trump’s tariff narratives and government spending cuts are expected to intensify hotter inflation and lower consumer spending.  

Tariffs, which are taxes on imported goods, can lead to higher prices for consumers, contributing to inflationary pressures. 

Additionally, they can disrupt global supply chains and reduce competition, further fueling inflation. 

Reduced consumer spending can result from higher prices and decreased confidence in the economy, leading to a slowdown in economic growth.

Government spending cuts can also have a negative impact on the economy. 

They can lead to job losses, reduced public services, and decreased investment, all of which can contribute to a decline in economic activity and consumer spending.

Stagflation concerns

The Fed’s ability to implement further rate cuts will be limited due to growing concerns around stagflation, ING Group said in a report.

The most recent economic data reveals that inflationary pressures remain strong, while consumer spending is faltering. 

The Federal Reserve’s preferred gauge of inflation, the core Personal Consumption Expenditures (PCE) deflator, increased by 0.4% month-over-month in February, exceeding expectations. 

This suggests that the Fed’s efforts to curb inflation may not be working as quickly as hoped.

Furthermore, real personal spending, which is adjusted for inflation, only rose by 0.1% month-over-month, indicating that consumers are becoming more cautious with their spending. 

This weakness in consumer spending was further underscored by a downward revision of January’s real personal spending from a contraction of 0.5% to a contraction of 0.6%.

Recession woes

The combination of persistent inflation and sluggish consumer spending raises concerns about the potential for a recession. 

The inflation data is alarming, but not entirely unexpected, according to ING’s James Knightley, chief international economist, US. 

Given the composition of the CPI and PPI inputs, ING anticipates that the risk to the 0.3% month-on-month consensus number was to the upside. 

“Remember that we need to average 0.17% MoM over time to bring us down to the 2% year-on-year target,” Knightley said in the report. 

We are moving in the wrong direction and the concern is that tariffs threaten higher prices, which mean the inflation prints are going to remain hot. This will constrain the Fed’s ability to deliver further interest rate cuts.

Rate cuts

“From a growth perspective those potential rate cuts can’t come quickly enough,” Knightley said. 

Sentiment has fallen sharply due to tariff-related fears of reduced spending power and job concerns linked to the Department for Government Efficiency’s actions. 

This decline in consumer confidence appears to be resulting in significantly reduced spending.

“Fed Chair Powell was fairly dismissive of this narrative earlier this month so it will be interesting to see if he changes his tune next week,” Knightley added.

Downward revisions to GDP

Many banks will likely issue downward revisions to their first quarter GDP growth forecasts over the weekend, according to ING.

The first negative result since the second quarter of 2020, when the pandemic was at its worst, would occur if March’s real consumer spending is flat, resulting in a -0.1% annualized rate for the first quarter.

“Given the drag from awful trade numbers this really does run the risk of a negative first quarter GDP growth rate,” Knightley said. 

As we head towards ‘Liberation Day’ on Wednesday and then the jobs report on Friday followed by Powell’s speech on the economic outlook, this sets us up for a volatile week ahead for markets.

The post Tariffs and spending cuts likely to increase US stagflation risks, warns ING appeared first on Invezz

US President Donald Trump’s plan to impose tariffs on imported vehicles is sending shockwaves far beyond the Detroit auto industry.

The policy is adding to investment risk and is set to hit global supply chains connected to the vast automotive sector, with potentially significant consequences for emerging economies like Thailand.

Thailand in the crosshairs: a vulnerable auto hub

“South Korea is most exposed, followed by Japan. Within ASEAN, Thailand — a regional manufacturing hub — is most vulnerable,” Nomura economists wrote in a note on March 27 about the auto tariff risks in Asia.

Thailand, a major player in Southeast Asia’s automotive industry, is bracing for impact.

The country’s Finance Minister, Pichai Chunhavajira, acknowledged that the auto part exports will be affected by the tariffs.

While Pichai did not quantify the precise impact of Trump’s impending levies, the implications are significant.

Thailand is the largest car production hub in Southeast Asia, boasting an extensive network of factories that supply parts and raw materials to global players ranging from carmakers to tire manufacturers.

The benchmark SET Index in Thailand dropped 1% on Friday to a one-week low.

The index is about 16% lower year to date as Trump’s trade war injects more uncertainties into a market already battered by corporate scandals, weak economic growth, poor corporate earnings, and political instability.

Although Thailand’s auto shipments account for just 4.3% of its exports to the US, weak global demand could depress shipments of auto parts elsewhere.

The vulnerabilities in Thailand underscore the existence of investor landmines worldwide as investors move some investments away from the US’s volatile markets.

Nomura analysts wrote, “These effects may take some time to materialize but, in our view, pose a clear medium-term threat to one of Thailand’s leading industries.”

The 25% tariff on all imported finished vehicles is slated to take effect on April 3.

A 25% tariff on auto parts is slated to take effect no later than May 3.

Trump’s executive order did not name China, but it said the pandemic and its impact on global supply chains has undermined the US’s ability to maintain a resilient domestic industrial base.

It also said that foreign auto industries “propelled by unfair subsidies and aggressive industrial policies, have grown substantially”.

The tariff announcement sent domestic and foreign auto stocks tumbling.

In Asia, Japan’s and South Korea’s car makers are expected to be in the direct line of fire, with shares of auto giants Toyota and Hyundai posting sharp losses since the executive order was signed.

In Europe, shares of automakers also fell, with Germany’s Volkswagen and BMW down 4% since Trump signed the executive order.

The post Beyond car stocks: Donald Trump’s tariffs threaten global auto supply chains appeared first on Invezz

Southeast Asia is reeling from a pair of devastating events, as a powerful earthquake in Myanmar leaves a trail of death and destruction, while rescuers in neighboring Thailand scramble to find survivors after a building collapse in Bangkok.

The toll from Friday’s 7.7-magnitude earthquake in Myanmar, the most powerful to strike the region in a century, continues to climb.

The country’s State Administration Council information team reported that the death toll has surpassed 800, with more than 2,000 people injured and 68 still missing.

In Bangkok, rescuers are engaged in a desperate search for survivors after a high-rise building under construction collapsed.

Authorities report that 10 people have been confirmed dead, 16 injured, and approximately 101 remain missing across three building sites in the city, including the 30-story high-rise.

At the site of the high-rise alone, more than 80 people are believed to be trapped, according to Bangkok Governor Chadchart Sittipunt.

The Thai government has declared the earthquake a level 3 disaster, categorized as major, and is coordinating rescue and relief operations accordingly, according to the Department of Disaster Prevention and Mitigation.

The Thai Meteorological Department reported 77 aftershocks as of 6 a.m. Bangkok time, although none were strongly felt in Thailand.

Bangkok city authorities have ordered safety audits of public and government buildings, with a group of civil engineers set to inspect the buildings and categorize damages based on severity.

Prime Minister Paetongtarn Shinawatra has pledged government assistance and financial relief to those affected.

Following a meeting on Saturday, she stated that the situation is now “safe” and advised residents of tall buildings to seek guidance from their building management regarding infrastructure safety.

Three hospitals in Bangkok were inspected on Friday night, with Ratwithi Hospital instructed to cease operations due to earthquake-related damage.

Eleven temporary shelters have been opened in the Thai capital to accommodate those displaced by the disaster.

Some rail services operated by Bangkok Expressway and Metro will remain closed on Saturday to ensure safety, according to local broadcaster PPTV.

Thailand’s stock and futures exchanges halted trading on Friday due to evacuations triggered by the earthquake. It remains unclear whether trading will resume on Tuesday.

While Thailand is a major manufacturing hub, companies like Samsung Electronics Co. have reported no disruptions to their operations.

Siam Piwat, the owner and operator of several shopping malls in downtown Bangkok, has stated that its buildings are structurally sound and will resume operations on Saturday.

The post Myanmar earthquake death toll soars; Thai rescuers search for dozens trapped in Bangkok collapse appeared first on Invezz