First Look With Surveillance: Russia Defaults, US Renews
It’s a broadly positive mood in equity markets this morning after stocks surged into the weekend. It also feels like shoulder season for investors ahead of a long weekend in Canada and the United States. So now it’s a matter of waiting for the next catalyst after last week’s flurry of Fedspeak and ahead of earnings season ramping up in mid-July. On the fight to bring down inflation: the Bank for International Settlements (colloquially known as the central bank to central banks) is out with its flagship annual report, which underscores the need to rein in inflation “quickly and decisively.”
On inflation: the weekly Bloomberg Nanos Canadian Confidence Index fell from 50.0 to 48.3 last week, which is the lowest since July 2020.
The BIS dedicates several pages in its annual report to crypto, saying “it is essential to fill data gaps and identify entry points for regulation.” And, on that note, be sure to check out Bloomberg’s deep dive on the turmoil that has left some observers wondering if the burgeoning asset class is facing a Lehman-like moment.
G7 PLANNING MORE RUSSIA SANCTIONS
First it was oil, now it’s Russian gold that’s being ostracized. A statement from Boris Johnson’s U.K. government indicates that nation will be joined by Canada, Japan, and the United States in banning gold imports from Russia. While Johnson’s office highlighted that gold exports contributed almost $20 billion to Russia’s economy last year, our Bloomberg News partners are pointing out the import bans are largely symbolic because several key organizations previously blocked imports. The cumulative impact of sanctions was made clear this weekend as Russia defaulted on US$100 million in debt interest payments. And how’s this for salt in the wound of Canada’s export-challenged energy industry: “France Wants Iranian, Venezuelan Oil Back on Market,” reads a headline on the Bloomberg terminal.
DYE & DURHAM SLASHES LINK TAKEOVER OFFER
It’s been a little more than six months since Dye & Durham announced it was buying Link Administration Holdings for $3.2 billion. Since then, it has run into regulatory hurdles in Link’s home country of Australia. And so now the Toronto-based provider of cloud-based software is slashing its offer 22 per cent to A$4.30 per share from A$5.50 per share. Link said the reduced offer is due to “the current state of the financial markets” as well as an unspecified undertaking that it says Dye & Durham is planning to make to the Australia Competition & Consumer Commission.
OTHER NOTABLE STORIES
- Voyager Digital, the TSX-listed crypto platform whose shares were cut in half last week after it disclosed exposure to Three Arrows Capital (3AC), confirmed today that it issued a default notice to 3AC. Voyager also said that as of Friday, it has US$137 million in cash and owned crypto on hand; that’s down from US$152 million as of June 20. Voyager added that it has retained Moelis & Company as a financial advisor.
- The tug-of-war over Spirit Airlines has intensified after Frontier Group Holdings raised its offer in an attempt to fend off the rival approach by JetBlue.
- SSR Mining shares sank as much as 21 per cent today; around 11am, the company acknowledged local media reports in Turkey and a social media post from the government suggesting SSR’s Copler mine might be forced to halt operations. SSR added in the statement that it suffered a “minor leak” of cyanide from a pipeline last week, which was reported to authorities.
- Notable data: U.S. durable goods orders
- Notable earnings: Nike
- 1130: Ontario Premier Doug Ford and Toronto Mayor John Tory meet at Queen’s Park (plus 1230 avail)
- G7 summit in Elmau, Germany