Russia is on the brink of an historic debt default as it hasn’t paid interest payments of $100 million which were due on the 27th of May, and subject to grace period that expired on Sunday night. This would be the country’s first foreign debt default since 1918, despite having the funds and the willingness to pay. The Kremlin blames Western sanctions as it assures the payment has been made but rejected due to international sanctions. Russian banks and banks linked to them were banned from the SWIFT network in March in a sweep of sanctions that effectively ostracised Moscow from the global financial system. Russian Finance Minister Anton Siluanov called the situation a “farce” and disputed the term default stating that term usually constitutes unwillingness or inability to pay.
The ongoing G7 (Canada, France, Germany, Italy, Japan, United Kingdom, United States and European Union) summit saw the group announce a $600bn initiative to counter China’s Belt and Road initiative. The group is set to raise $600bn over five years to fund infrastructure projects in middle and low-income countries, with the U.S. promising already $200bn and the EU $300bn. The announcement comes as several intelligence agencies warned of the Chinese debt traps in developing countries in recent years, despite no evidence so far of that and debt relief initiatives from the G20 nations that has seen $10.3bn delivered since May 2020 in debt relief, and China providing the majority of that package.
In the US, poor economic data last week showed consumer confidence at an all-time low, prompting investors to lower expectations on increases in US interest rates. Futures prices show traders now expect the benchmark US Federal Reserve funds rate to stabilise around 3.5% from March next year, a decrease from previous expectations which were expected to reach around 4% in 2023.
The situation is similar in the United Kingdom with core retail sales falling by -5.7 % in May compared to last year as inflation leads households to buy less food as per reported by the Office for National Statistics (ONS). The fear of recession and potential rise in unemployment is leading markets to expect lower increase in interest rates as well.
Cable saw US Dollar make small losses on Friday. GBPUSD opened at 1.2285 and close slightly under 1.2262.
GBPEUR remained stable last week as the pair opened at 1.1618 and closed to 1.1614, punctuating a calm week with just 0.10% increase on the pair.
EURUSD opened at 1.0526 and closed at 1.0554, marking small gains for the EUR.
This website uses cookies to ensure you get the best experience when browsing. We use our own and third party cookies on this site for various purposes such as giving you a more personalised experience and adapting advertising to your interests. You can manage or disable cookies by clicking on "Cookie Preferences". For more information about which cookies we use and how we use cookies, see our Cookie Policy.
This website uses cookies to improve your experience while you navigate through the website. Out of these, the cookies that are categorised as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyse and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies, but opting out of some of these cookies may affect your browsing experience.
Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionality and security features of the website. These cookies do not store any personal information.
Cookie
Duration
Description
cookielawinfo-checkbox-advertisement
1 year
The cookie is set by GDPR cookie consent to record the user consent for the cookies in the category "Advertisement".
cookielawinfo-checkbox-analytics
1 year
This cookies is set by GDPR Cookie Consent WordPress Plugin. The cookie is used to remember the user consent for the cookies under the category "Analytics".
cookielawinfo-checkbox-necessary
1 year
This cookie is set by GDPR Cookie Consent plugin. The cookies is used to store the user consent for the cookies in the category "Necessary".
cookielawinfo-checkbox-others
1 year
This cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Others".
cookielawinfo-checkbox-performance
1 year
This cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Performance".
Functional cookies help to perform certain functionalities like sharing the content of the website on social media platforms, collecting feedback, and other third-party features.
Cookie
Duration
Description
pll_language
1 year
This cookie is set by Polylang plugin for WordPress powered websites. The cookie stores the language code of the last browsed page.
Performance cookies are used to understand and analyse the key performance indexes of the website which helps in delivering a better user experience for visitors.
Analytical cookies are used to understand how visitors interact with the website. These cookies help provide information on metrics the number of visitors, bounce rate, traffic source, etc.
Cookie
Duration
Description
CONSENT
16 years 5 months
These cookies are set via embedded youtube-videos. They register anonymous statistical data on for example how many times the video is displayed and what settings are used for playback.No sensitive data is collected unless you log in to your google account, in that case your choices are linked with your account, for example if you click “like” on a video.
Advertisement cookies are used to provide visitors with relevant ads and marketing campaigns. These cookies track visitors across websites and collect information to provide customised ads.
Cookie
Duration
Description
IDE
1 year 24 days
Used by Google DoubleClick and stores information about how the user uses the website and any other advertisement before visiting the website. This is used to present users with ads that are relevant to them according to the user profile.
test_cookie
15 minutes
This cookie is set by doubleclick.net. The purpose of the cookie is to determine if the user's browser supports cookies.
VISITOR_INFO1_LIVE
5 months 27 days
This cookie is set by Youtube. Used to track the information of the embedded YouTube videos on a website.
YSC
session
This cookies is set by Youtube and is used to track the views of embedded videos.
yt-remote-connected-devices
never
These cookies are set via embedded youtube-videos.
yt-remote-device-id
never
These cookies are set via embedded youtube-videos.