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The USD/CHF exchange rate moved sideways on Monday morning as focus among investors shifted from the upcoming Swiss National Bank (SNB) and Federal Reserve interest rates decisions. It rose to a high of 0.8845, a few points above this month’s low of 0.8757.

Swiss National Bank rate decision

The USD to CHF exchange rate wavered on Monday morning ahead of the upcoming SNB decision.

Economists polled by Reuters expect the bank to deliver another interest rate cut this week as concerns about the Swiss franc’s strength continue.

The Swiss franc has risen by almost 4% from its lowest point this year against the US dollar. It has, however, softened a bit against the euro, with the EUR/CHF pair rising to a high of 0.9500, its highest level since July last year.

The SNB will also cut rates because Swiss inflation has continued falling in the past few months. Data from the statistics agency showed that the headline Consumer Price Index (CPI) dropped to 0.3% in February from 0.6% a month earlier.

The Swiss CPI has been in a downward trend after peaking at 3.5% in 2022. There are also signs that the country’s inflation will drop below zero in the next few months.

As such, the SNB hopes that these rate cuts will help to incentivize spending in the country and lift prices higher.

Odds of the SNB cut are evident in the Swiss government bonds. Data shows that the ten-year yield of Swiss government bonds dropped to 0.677% down from this month’s high of 0.90%. The five-year yield dropped to 0.56% from the YTD high of 0.637%.

Federal Reserve interest rate decision

The USD/CHF exchange rate will also react to the upcoming Federal Reserve interest rate decision.

Economists expect the Federal Reserve to leave interest rates unchanged at 4.50% for the second consecutive meeting.

In its last meeting, the bank signaled that it would deliver just two interest rates this year.

That meeting, however, happened before Donald Trump restarted his trade war. Since that meeting, Trump has gone to a serious trade conflict with countries like Mexico, Canada, and China. Trump has also hinted that he will implement reciprocal tariffs in April.

These tariffs will likely lead to a slow US economy, with the FedNow data showing that the economy will contract by 2.4% in this first quarter.

US bond yields have also dropped in the past few months. The 10-year yield dropped from the year-to-date high of 4.80% to 4.30%. Similarly, the 30-year yield has moved from 5% to 4.61%.

The US and Swiss bond yields mean that investors are borrowing the cheap franc and investing in the US.

USD/CHF technical analysis

USDCHF chart by TradingView

The daily chart shows that the USD to CHF exchange rate has retreated in the past few months. It has dropped from a high of 0.9200 this year to the current 0.8845.

The pair has dropped to the 50% Fibonacci Retracement level. It has also formed a bearish flag chart and a rising wedge.

The USD/CHF pair is about to form a mini death cross as the 50-day and 100-day moving averages cross each other.

Therefore, the path of the least resistance for the pair is bearish, with the next point to watch being at 0.8762. A break below that level will point to further downside, potentially to the 61.8% retracement at 0.8590.

The post USD/CHF analysis: forms bearish pattern ahead of SNB, FOMC appeared first on Invezz

Stocks

Micron stock price forecast: will it rise or fall after earnings?

Micron stock price has been boring since July last year. MU has remained between the key support and resistance levels at $114.40 and $84.58, respectively. It remains about 35% below the highest level in 2024. So, what is the MU stock price forecast ahead of its quarterly earnings?

Micron stock price waits for earnings

Micron Technology and other semiconductor companies have done well in the past few years, helped by increased corporate spending because of AI. Its annual revenue jumped from $15 billion in 2022 to over $25 billion in the last financial year. The trailing twelve months (TTM) revenue jumped to over $29 billion.

The last quarterly results showed that Micron’s revenue surged to $8.7 billion in Q3, a big increase from the $4.73 billion it shipped in the same quarter a year earlier. This revenue growth happened because of its strong data center business whose revenue moved to 50% of its total figure for the first time.

Micron became more profitable as the net loss jumped to over $1.87 billion during the quarter.

On the positive side, the company will likely continue doing well this year as companies like Microsoft, xAI, and Amazon are keen on accelerating their AI spending. Estimates are that the top companies will spend over $320 billion this year.

The challenge, however, is that there are signs that the AI bubble may be starting to burst. This explains why many AI stocks like NVIDIA, AMD, SoundHound, and C3.ai have crashed this year.

Further, there are concerns that the ongoing trade war between the US and China will impact Micron’s results. Historically, Micron generated about 25% of its sales from Chinese companies. This has changed after the company was forced to end some of its trading relationships with Chinese companies.

Analysts see more MU earnings growth

Wall Street analysts expect the upcoming results to show that Micron’s business continued doing well in the last quarter.

The average estimate is that Micron’s revenue rose by 36% in the second quarter of financial year 2025 to $7.92 billion.

They also see the forward guidance for the next quarter being 21.73% to $8.29 billion. For the year, Micron’s revenue is expected to be almost $35 billion, up by almost 40% to $35 billion. This growth will slow to 28% to $44.7 billion.

A potential catalyst for the Micron stock price is that the consumer business, which has weakened in the past few years may start to grow again this year. Reports by companies like IDC and Gartner estimate that the PC industry will see a modest single-digit growth trajectory this year.

The other catalyst is that Micron has become an undervalued company, considering that its business is still growing. It has a non-GAAP forward P/E ratio of 14.7, much lower than the sector median of 21. The forward GAAP multiple of 16.4 is lower than the median of 26.

Micron stock price analysis

MU stock chart by TradingView

The daily chart shows that the MU share price has remained in a tight range in the past few months. It has remained between the support and resistance levels at $85 and $114.4 since July last year.

Micron stock is consolidating at the 50-day and 100-day Exponential Moving Averages (EMA). The two lines of the MACD indicators have pointed upwards.

Therefore, the Micron stock price will likely move in either direction after its earnings. The key levels to watch will be at $85 and $115. The odds are high that the latter will prevail because the average Micron stock price forecast is $129.

The post Micron stock price forecast: will it rise or fall after earnings? appeared first on Invezz

Stocks

Hang Seng, Nikkei 225 lead Asian markets higher on Monday

Asian stock markets traded mostly higher on Monday, taking cues from Wall Street’s positive finish on Friday and reacting favorably to China’s new stimulus measures aimed at reviving consumption and supporting the stock and real estate markets.

However, concerns over the impact of President Donald Trump’s trade policies continued to weigh on investor sentiment.

The markets will be closely watching the US Fed’s decision scheduled for later this week.

Japan’s Nikkei 225 surges past 37,500

Japanese stocks posted sharp gains, with the Nikkei 225 Index rising 422.14 points, or 1.14%, to close the morning session at 37,475.24.

The index briefly touched a high of 37,561.21 as index heavyweights, exporters, and technology stocks led the advance.

SoftBank Group gained more than 2%, while Uniqlo operator Fast Retailing added almost 1%.

Among automakers, Honda and Toyota both advanced more than 1%, supported by a weaker yen and expectations of strong global demand.

Hong Kong, and China Stocks surge

Hong Kong stocks climbed to a one-week high, supported by better-than-expected economic data from China.

Optimism surrounding Beijing’s newly announced “Special Action Plan to Boost Consumption,” designed to stimulate domestic demand, also fueled the rally.

Additionally, state media outlet Xinhua reported that Beijing intends to stabilize the stock and real estate markets while implementing measures to boost the birth rate.

The Hang Seng Index rose 1.5% to 24,300.85, while the Hang Seng Tech Index edged up 0.1%.

On the mainland, performance was mixed. The CSI 300 Index dipped 0.1%, while the Shanghai Composite Index gained 0.3%, reflecting cautious optimism as investors assessed China’s economic trajectory.

China’s latest economic data showed retail sales increased by 4% in the first two months of the year compared to the same period last year, exceeding Bloomberg’s estimate of a 3.8% rise.

Industrial production expanded by 5.9%, surpassing expectations of 5.3%, while fixed-asset investment grew 4.1%, beating projections of 3.2%.

Other Asian markets on Monday

The Australian stock market saw notable gains, extending its positive momentum from the previous session.

The S&P/ASX 200 Index rose 49.90 points, or 0.64%, to 7,839.60 after touching a high of 7,858.50 earlier in the session.

The broader All Ordinaries Index climbed 57.20 points, or 0.71%, to 8,070.50.

The benchmark KOSPI jumped 1.5% to 2,607.41 points on Monday, reaching its highest level in over two weeks as it tracked Wall Street’s gains from last week amid improved market sentiment.

Tech heavyweights led the rally, with Samsung Electronics surging 4.4% and SK Hynix adding 1.2%.

Wall Street on Friday

Stocks staged a strong comeback on Friday after Thursday’s sharp sell-off, with all major indexes posting substantial gains.

The tech-heavy Nasdaq led the rally, surging 451.07 points, or 2.6%, to close at 17,754.09.

The S&P 500 jumped 117.42 points, or 2.1%, to 5,638.94, while the Dow climbed 674.62 points, or 1.7%, to 41,488.19.

Despite Friday’s rebound, all three major indexes ended the week in the red.

The Dow dropped 3.1% for the week, while the Nasdaq and S&P 500 posted losses of 2.4% and 2.3%, respectively.

The rally was driven by bargain hunting, as traders looked to scoop up stocks at lower valuations after Thursday’s sell-off pushed the Nasdaq and S&P 500 to their lowest closing levels in six months.

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Stocks

Forever 21 files for bankruptcy in the US: what went wrong?

Forever 21’s US operating company, F21 OpCo, has filed for Chapter 11 bankruptcy for the second time in six years, citing declining mall traffic and mounting competition from online retailers.

While F21 OpCo operates Forever 21’s US locations and holds the brand’s license in the country, its international stores remain unaffected as they are operated by independent licensees.

The filing, made in the US Bankruptcy Court in Delaware on Sunday, signals a likely liquidation of its US operations, as the company has been unable to find a buyer for its approximately 350 domestic stores.

The company announced that it will conduct liquidation sales at its physical stores while also engaging in a court-supervised sale and marketing process for some or all of its assets.

What bankrupted Forever 21 in the US?

Chief Financial Officer Brad Sell pointed to intense competition from foreign fast-fashion companies that have leveraged the de minimis exemption—allowing duty-free imports of lower-cost clothing—to undercut Forever 21’s pricing and margins.

He also cited rising costs and broader economic challenges that have impacted consumer demand.

Forever 21 previously filed for Chapter 11 in 2019 before being acquired out of bankruptcy by Sparc, a joint venture between Authentic Brands Group (ABG), Simon Property Group, and Brookfield Asset Management.

However, despite efforts to revive the brand, the shift in consumer shopping habits away from malls and toward online fast fashion has continued to pressure the business.

Forever 21’s estimated assets are listed between $100 million and $500 million, while its liabilities fall between $1 billion and $10 billion, according to its bankruptcy filing.

The company also reported having between 10,001 and 25,000 creditors.

Forever 21’s future

If a successful sale of assets occurs, Forever 21 may reconsider a complete wind-down of its operations in favor of a going-concern transaction.

For now, the company has assured that its US stores and website will remain operational while liquidation and sale proceedings take place.

The filing comes just weeks after Forever 21’s parent company, Sparc Group, merged with JCPenney to form Catalyst Brands.

At the time of the merger, Catalyst Brands had indicated that it was “exploring strategic options” for Forever 21, but no clear turnaround path emerged.

Although F21 OpCo is headed for liquidation, the Forever 21 brand itself could survive in some form.

Authentic Brands, which retains ownership of the trademark and intellectual property, may look to license the name to other retailers.

However, ABG CEO Jamie Salter previously expressed regret over acquiring Forever 21, calling it “the biggest mistake I made.”

Founded in Los Angeles in 1984 by South Korean immigrants, Forever 21 was once a dominant player in the fast-fashion industry, catering to young shoppers seeking trendy and affordable clothing.

At its peak in 2016, the company operated around 800 stores worldwide, including 500 in the US.

However, changing retail dynamics and increasing competition from online players have eroded its market position, ultimately leading to its second bankruptcy in less than a decade.

The post Forever 21 files for bankruptcy in the US: what went wrong? appeared first on Invezz

World News

LATAM crypto: fraud risks rise in Mexico while Argentina bets on lithium tokens

LATAM’s cryptocurrency landscape continues to grow.

This week’s highlights come from Mexico, where Sumub (a digital assets security platform) published a report detailing the cases of digital asset fraud and how they affect users.

Sumsub’s “2024 Identity Fraud Report” reported a 1.6% rate of bitcoin fraud in Mexico.

This digital asset security platform offers a thorough breakdown of data on identity fraud trends and prevention, emphasizing the growing complexity of fraud schemes as they become more common in the market.

According to Cointelegraph, the survey highlights a worrying reality for users, as the number of bitcoin investors grows.

In an interview with local media outlet Milenio, Sumsub’s expansion director, Daniel Mazzuccheli, stated that there are already over 3 million digital asset users in Mexico, a figure that is rapidly growing.

With this expansion comes increased risk, as criminal organizations become more adept in their tactics.

Mazzuccheli added, “As the number of users grows, so does the sophistication of scammers”.

With technological advancements, new opportunities to commit fraud are emerging, notably in Mexico, where more than 3 million people possess cryptocurrencies.

According to the research, identity fraud is the most common type of fraud worldwide, with an increase of 137%.

Sumsub stated that current technology has simplified the execution of fraudulent actions by reducing the requirement for specialized knowledge or technical expertise.

This progress has made fraud cheaper to carry out, and numerous “fraud-as-a-service” companies give tools and methods to inexperienced scammers, making fraudulent acts more accessible and ubiquitous than ever before.

Argentina’s lithium tokenization initiative

In Argentina, mining company Atómico 3 S.A. has embarked on an ambitious venture to tokenize reserves of lithium located within the Salares de Mogna.

According to a statement released by founder Pablo Rutigliano, the tokenization process will provide greater transparency into mining operations within the province of San Juan.

For decades, San Juan has played a prominent role in metal extraction throughout the country, and the push into lithium mining serves to further diversify its natural resources portfolio.

Through the innovative application of blockchain technology, Rutigliano hopes tokenized assets will grant unprecedented oversight into Argentina’s lithium industry from extraction to distribution.

With improved visibility on a global scale, Argentinian lithium producers aim to strengthen their position as suppliers to the new green economy.

Atómico 3 has moved fast in establishing its domination in the region, signing preliminary agreements to govern more than 50,000 hectares over the next half-decade.

The opening stage will scrutinize a sizable slice of 10,000 hectares while ongoing geological analysis remains relentless.

Situated around 100 kilometres from the provincial capital in the arid Angaco Department, the remote Salar de Mogna’s parched climate and meagre yearly rainfall make it a prime location for lithium extraction, giving Argentina a strategic stronghold.

With its tokenization, lithium has the chance to reinvent how the nation leverages its natural assets, catapulting it to the forefront of the industry and powering progress towards a sustainable future reliant on clean energy.

Bolivia’s YPFB adopts cryptocurrency for energy imports

Bolivia is facing a serious economic issue as the country has a severe lack of dollars and gasoline, forcing the state energy agency YPFB to use cryptocurrencies for energy imports.

According to Reuters, a YPFB official acknowledged that the decision comes as Bolivia’s foreign currency reserves plummet due to years of low natural gas exports.

The country is dealing with a rising gasoline issue, as evidenced by regular long lineups at petrol stations and growing public discontent expressed through rallies.

The country that was previously known for its abundance of natural gas has since experienced a downward spiral.

As domestic output has decreased, the country has transitioned from being a net energy exporter to a net energy importer.

The decrease is due to a lack of geopolitical sources of supply, underspending on exploration, and a lack of large new gas finds.

Depleting reserves have raised alarms about a long-term energy shortage, which could fuel more civil unrest amid growing hardship from scarce fuel supplies and an even more difficult economic backdrop.

With these current challenges, the government has approved digital asset consumption as a means of a broader energy import stabilization mechanism.

YPFB, Bolivia’s state-run energy provider, plans to use cryptocurrencies to supplement the country’s declining dollar reserves.

YPFB’s spokesperson added that: “From now on, these (cryptocurrency) transactions will be carried out,” stressing they need to find alternative financing methods because there is a shortage of hard currency.

The post LATAM crypto: fraud risks rise in Mexico while Argentina bets on lithium tokens appeared first on Invezz

World News

Spirit Airlines vs Southwest: why 2025 could shake up the skies

Spirit Airlines chief executive Ted Christie says the company is positioned to steal share from its larger rival, Southwest Airlines Co (NYSE: LUV), in 2025.

Southwest will start charging its customers for checked bags from May, a significant change in strategy that may hurt the air carrier in the beginning – and Spirit plans on “taking advantage of that,” said Christie in an interview this week.

CEO Ted Christie’s remarks arrive only hours after Spirit Airlines emerged from bankruptcy.

The ultra-low-cost airline is much leaner and all set to take on its rivals now, he added.

Why customers may switch from LUV to Spirit Airlines

It’s the first time for Southwest Airlines Co to consider charging for checked bags.

The largest domestic US carrier has offered two free checked bags to all customers since its inception in 1966.

In fact, the time-tested perk has historically helped LUV navigate higher fuel prices and recessions.

But now that it’s changing the free checked bags policy and introducing basic economy class for the first time, chances are that some of its customers will switch to Spirit Airlines, as per Christie.

However, the Dallas headquartered firm touted its policy change as means for driving revenue growth in a press release on March 11^th.

The narrative has sat well with investors considering Southwest stock is up some 15% since the announcement.

Spirit Airlines to focus on returning to profitability

While the ultra-low-cost air carrier is significantly smaller in operations than Southwest Airlines, it still competes with LUV in several cities, including Kansas, Nashville, and Milwaukee.

For those travelling to or from these cities, booking with Spirit on Expedia may be significantly cheaper than booking with Southwest at present, according to the company’s chief executive.

CEO Ted Christie also confirmed in the CNBC interview that Spirit Airlines, after emerging from bankruptcy, is laser focused on returning to profitability.

The company’s loss more than doubled to $1.2 billion last year on Pratt & Whitney engine recall, increased competition, higher costs, and failure to merge with JetBlue Airways.

How restructuring helped Spirit Airlines in 2025

Earlier this week, Spirit Airlines chief executive Ted Christie signalled the possibility of a merger to become the fifth-largest US carrier remained on the table.

But the company wants to stabilise itself first after exiting bankruptcy on March 12^th, he added.

The restructuring helped Spirit lower its debt by a remarkable $795 million.

It brought the airline about $350 million in fresh capital as well.

Spirit Airlines is fully committed to going live again on a stock exchange, but is yet to disclose a specific timeline for that. CEO Christie’s remarks arrive only weeks after Spirit rejected a more than $2.0 billion buyout proposal from peer Frontier Group.

The post Spirit Airlines vs Southwest: why 2025 could shake up the skies appeared first on Invezz

World News

Is Bitcoin Pepe a buy despite recent BTC decline?

Bitcoin may have been painful for its investors this year, having lost about 20% in less than two months. But the pullback has utterly failed to faze long-term bulls like Anthony Scaramucci.

Scaramucci dismissed recent weakness in BTC as temporary in a CNBC interview this week, adding the asset will resume its upward trajectory over the next three to six months.

The founder of Skybridge Capital cited several catalysts that could help Bitcoin price rally again through the remainder of this year.

That bodes good news for crypto investors more broadly since whatever happens with BTC tends to reflect in the crypto market at large, which now includes a new contender, Bitcoin Pepe.

How is Bitcoin Pepe related to the price of BTC

Positive developments around the price of Bitcoin may prove to be an even bigger tailwind for the Bitcoin Pepe meme coin as it touts itself as one of the closest relative of BTC.

Bitcoin Pepe is the “world’s only Bitcoin meme ICO” as per its website, which means it stands to benefit rather meaningfully as institutional buyers continue to flock to the world’s largest crypto by market cap as Scaramucci projected in the CNBC interview.

The narrative seems to be sitting quite well with the Bitcoin Pepe community considering it the meme coin presale has raised close to $4.9 million within a matter of weeks.

Following the presale, Bitcoin Pepe plans on listing on a crypto exchange to make it even easier for interested investors to build a position in it, which may help drive the price of the meme coin further up in 2025.

Other macro tailwinds that could help Bitcoin Pepe

Anthony Scaramucci continues to see Bitcoin as a “very valuable long-term asset” given the US government’s plans of a strategic Bitcoin reserve.

“The fact that the United States is going to hold this asset means that other countries are going to end up buying this asset as well,” he added.

This will unlock significant further demand for Bitcoin that will drive the price of the digital assets up. But, more importantly, it will help add a layer of legitimacy to the crypto market overall that may significantly benefit the likes of Bitcoin Pepe.

The meme coin is currently going for $0.0281 only, which means it doesn’t require a massive sum of capital to build a sizable early position in it either.

All in all, the Trump administration is committed to bringing cryptocurrencies to mainstream finance that could continue to drive global investors to digital assets, including Bitcoin Pepe.

If you’re interested in learning more about this up-and-coming meme coin, click here to visit its website now.

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Politics

Could the US default on its debt this year?

The US debt currently sits at around $36.6 trillion and the government is, once again, approaching its legal borrowing limit.

With no clear plan to raise the debt ceiling, analysts warn that a default could happen as soon as this summer.

At the same time, political divisions are deepening as lawmakers struggle to agree on a solution, while interest payments on the debt are piling up at an alarming rate.

Could the unthinkable happen?

Is the debt crisis getting worse?

The US budget deficit has surged past $1.15 trillion in the first five months of fiscal 2025, up 38% from the same period last year.

February alone saw a deficit of $307 billion, nearly two and a half times January’s figure.

Despite some spending reductions, the government continues to spend far more than it collects in revenue.

Interest payments on the debt have already hit $396 billion this year, now the third-largest budget item after Social Security and Medicare.

President Donald Trump has made fiscal responsibility a priority, launching the Department of Government Efficiency (DOGE) under Elon Musk to identify cost-cutting measures.

However, there has been little evidence that it has made any meaningful impact as of now.

Meanwhile, lawmakers are debating whether to extend Trump’s 2017 tax cuts permanently, which could cost an additional $3.3 trillion over the next decade.

The math simply doesn’t add up.

Can tax cuts fix the problem?

Trump and Senate Republicans want to extend tax cuts while keeping their official cost at zero through an accounting method that assumes they are already part of the tax code.

This approach would make it easier to pass the cuts without offsetting spending reductions, but not everyone is convinced.

Some Republicans argue that extending the 2017 tax law without cuts elsewhere would explode the deficit even further.

The House has already passed a tax plan that includes $4.5 trillion in cuts over ten years, offset by just $2 trillion in spending reductions.

However, the Senate remains divided, and some fiscal conservatives are pushing for far deeper cuts to entitlement programs like Medicaid and Social Security, as well as tax breaks for businesses.

The debate is delaying progress on broader budget negotiations, making it harder to address the looming debt ceiling deadline.

Will Congress raise the debt ceiling in time?

Raising the debt ceiling has become a political battle.

The House wants to package it with tax cuts and spending reductions, while some Senate Republicans prefer a separate vote to force Democrats to take a public stance on increasing borrowing.

But time is running out.

If Congress does not act, the US could default on its debt obligations by mid-2025, a scenario that, year by year, looks more realistic.

Treasury Secretary Scott Bessent expects a deal to be reached by summer, but there is no clear path forward.

Some Republican senators have never voted for a debt ceiling increase before and insist on major spending cuts in exchange.

Others believe the ceiling should be raised without conditions to prevent economic turmoil.

The lack of consensus raises the risk that the government could miss payments for the first time in history.

What happens if the US defaults?

A US default would be unprecedented.

The government would be unable to pay some of its bills, potentially delaying Social Security payments, federal salaries, and military funding.

The financial markets would react violently.

The volatility index would shoot up, with another big sell-off to be expected.

Additionally, interest rates would likely spike with the dollar losing credibility as the world’s reserve currency as a consequence.

In 2011, just the threat of a default led to a US credit rating downgrade and market turmoil.

This time, with higher debt levels and an economy that is flirting with a recession, things look much more bleak.

Bridgewater founder Ray Dalio has warned that the US faces a severe supply-demand problem with its debt, forcing the government to sell more than the world is willing to buy.

If buyers dry up, the Federal Reserve may be forced to print money to purchase government debt, which could fuel inflation and weaken confidence in the financial system.

He predicts that “shocking developments” could arise, including potential restructuring of US debt or diplomatic pressure on foreign nations to absorb more Treasury securities, which could strain diplomatic relations.

If foreign investors, who hold a significant portion of US debt, lose confidence and start selling off their holdings, borrowing costs could spiral out of control.

Once again, the US is in the spotlight for worrying reasons.

Once again, the debt ceiling discussions are causing anxiety to global investors.

Eventually, this situation has to be resolved instead of kicking the can down the road.

But is this administration the right one to fix it?

The post Could the US default on its debt this year? appeared first on Invezz

Politics

How a Ukraine-Russia ceasefire could reshape energy markets

Ukraine’s potential agreement to a US-negotiated ceasefire could have far-reaching consequences for the global commodity market.

If implemented, this ceasefire could lead to a significant shift in commodity prices and trade flows.

“Although still early in the process, the energy market implications of a Ukraine-Russia ceasefire could be huge,” Jorge Leon, head of geopolitical analysis at Rystad Energy, said in a note.

The early market reactions observed earlier this week have highlighted a crucial aspect of the oil and gas markets: the geopolitical risk premium currently embedded in prices.

Should a truce be successfully implemented, this risk premium is expected to experience a sharp decline, according to Leon. This decline would directly translate to a reduction in oil and gas prices, easing the current market tension.

The relationship between geopolitical tensions and oil and gas prices is well-established.

Therefore, a truce or any measure that significantly reduces geopolitical tensions can have a calming effect on the markets.

By decreasing the perceived risk of supply disruptions, it lowers the geopolitical risk premium, leading to a subsequent decrease in oil and gas prices.

Sanctions on hydrocarbons may be lifted

“More importantly, the likelihood of a permanent peace agreement has now increased compared to just a few days ago, after the infamous televised clash between President Zelensky and President Trump in the Oval Office,” Leon added.

In addition to the obvious humanitarian benefits, a permanent ceasefire between Russia and Ukraine would have wide-ranging and sweeping implications for global energy markets.

First and foremost, a ceasefire would certainly entail the lifting of sanctions on Russian hydrocarbons, according to Rystad Energy.

Increased access to Russian gas supplies would likely exert downward pressure on gas prices across the board, with a particularly notable impact on the Title Transfer Facility (TTF) benchmark, which serves as the primary reference point for European gas prices.

This decrease in prices could be attributed to a greater supply of gas in the market, potentially leading to a surplus and reducing the scarcity that often drives price increases.

The TTF experienced a significant drop of nearly 13% in mid-February, potentially foreshadowing President Trump’s subsequent confirmation of discussions with Russian President Vladimir Putin.

These discussions aimed to initiate immediate talks to resolve the war in Ukraine.

Impact on oil markets

The downward pressure on oil prices caused by a permanent ceasefire may be less pronounced.

While Russia’s crude oil production is currently capped by its OPEC+ target, and not significantly hampered by international sanctions, there is potential for increased production and export in the future.

This could occur if Russia decides to exceed its OPEC+ quota or if the OPEC+ agreement is revised to allow for higher Russian output.

Several factors could motivate Russia to boost production, including a desire to increase revenue, gain market share, or exert political influence.

Source: Kpler

However, such a move could also trigger a response from other OPEC+ members, potentially leading to a price war or a collapse of the agreement.

Additionally, any significant increase in Russian oil exports could face logistical challenges, such as limited pipeline capacity or a shortage of tankers.

Leon said:

Interestingly, a lower oil price might be more conducive for the US to apply maximum pressure on Iran.

Strategy towards Iran

The Trump administration’s strategy towards Iran could involve leveraging the global oil market dynamics to their advantage, according to Leon.

By applying maximum pressure on Iran, the US aims to curtail Iranian oil exports, potentially leading to a loss of around 1.5 million barrels per day.

This strategy might be perceived as more feasible in a low-price environment, where the impact on global oil prices would be less severe.

Several factors contribute to this favorable low-price environment. The OPEC+ alliance, consisting of OPEC members and other major oil-producing countries like Russia, has been increasing production levels.

This increased supply, coupled with growing Russian oil exports, creates a surplus in the global oil market, putting downward pressure on prices.

In this context, the loss of Iranian oil exports, while significant, might be absorbed by the market without causing a major price spike.

This scenario allows the Trump administration to pursue its maximum pressure campaign against Iran with reduced economic repercussions for the US and its allies.

Global trade flows could shift if a negotiated peace is reached in Ukraine, and Russian piped gas may resume to Europe.

“We are still far away from a permanent ceasefire agreement between Russia and Ukraine, but these developments offer a glimmer of hope,” Leon said.

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Business

PDD stock price forms giant triangle pattern ahead of earnings

PDD Holdings stock price has done well this year, helped by the ongoing optimism about China and its strong revenue growth. It has jumped by over 26% this year, giving it a market cap of over $170 billion and making it the 11th biggest company in China. It is the fourth-biggest tech firm in the country after Tencent, Alibaba, and Xiaomi.

PDD is benefiting from China’s recovery

There are signs that the Chinese economy has bottomed, helped by the stimulus measures implemented by Beijing.

Recent data showed that China’s manufacturing and services PMIs have constantly remained above 50, a sign that they are expanding.

A report by the statistics agency showed that China’s economy hit its 5% target in 2024 as it surged by 5.4% a year earlier. Beijing has set a target to grow the economy by another 5% this year.

One approach that Xi Jinping is using is leaning on the technology sector to drive growth. Earlier this year, he held a meeting with tech leaders, including Jack Ma, the founder of Alibaba.

Wall Street analysts have taken note of this. Just this week, analysts at HSBC downgraded American stocks and recommended that investors should instead invest in China, where authorities are focused on growth.

Chinese tech companies have responded well. Alibaba stock price has soared, while the Hang Seng Tech index has soared.

Temu parent company is doing well

PDD Holdings, which owns brands like Pinduoduo and Temu, has become one of the best-performing companies in China in terms of revenue growth and profitability.

Its annual revenue has jumped from over $4.3 billion in 2019 to over $34 billion in 2023. Its trailing twelve-month revenue soared to over $53 billion, helped by Temu, the viral shoppin platform.

The most recent financial results showed that its revenue jumped by 44% in Q3 to $14.1 billion. This growth led to a 46% increase in its operating profit to $3.46 billion and a 61% increase in profit to $3.5 billion. Still, despite this growth, the management warned that it was facing intense competition and macro challenges.

PDD earnings ahead

The next key catalyst for the PDD Holdings stock price is its earnings, which will come out on Thursday next week.

Wall Street analysts believe that PDD’s revenue will come in at 115 billion CNY, a 30% increase from Q4 ’23. This revenue growth will lead to an annual figure of 398 billion CNY, a 60% from 2023. They expect that its annual revenue will get to $497.7 billion.

PDD has one of the strongest balance sheets, with over $43 billion in cash, no inventory, and just $737 million in debt.

The main risk that PDD Holdings faces is that Temu’s future is uncertain since other similar attempts to offer a similar solution have failed. There are signs that Temu’s business is slowing. Data by SimilarWeb shows that the total visits in February dropped by 8% to 990 million.

PDD Holdings stock price analysis

PDD chart by TradingView

The weekly chart shows that the PDD share price has remained in a tight range in the past few months. Connecting its highest swings since February 2021 and its lowest points since March 2022 shows that it has formed a symmetrical triangle pattern.

The PDD stock price is consolidating at the 50-week and 25-week Exponential Moving Averages (EMA). Also, the MACD and the Relative Strength Index (RSI) indicators have all pointed upwards.

The two lines of the triangle pattern are nearing their convergence point. Therefore, there is a likelihood that the stock will make a big move ahead. While it is still too early to predict, chances are that the PDD share price will have a strong bullish breakout. Such a move would see it rise to $165, the highest swing in 2024, which is about 35% above the current level.

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