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The global energy crisis deepened on Tuesday as a fresh spike in natural gas prices in Europe and the United States threatened to push some of the world’s biggest economies into recession.
Gas markets in Europe jumped 10% to €251 a megawatt-hour, equivalent in energy terms to more than $400 a barrel of oil, as traders rushed for supplies ahead of winter . Prices more than doubled from already extremely high levels in June, although they eased slightly later on Tuesday.
These measures follow the restriction of supplies by Russia in retaliation for Western powers supporting Ukraine after the invasion of Moscow. Traders fear competition for maritime shipments of liquefied natural gas with Asian utilities ahead of the winter heating season. European politicians have accused Moscow of weaponizing supplies.
With gas prices at more than 10 times their normal level, the possibility of a deep recession has increased, with investors now more pessimistic about the German economy than at any time since the US debt crisis. euro area ten years ago.
Gas prices in Europe are expected to stay near record highs or climb even higher as winter approaches, with Berlin discussing the possibility of rationing gas use and governments from London to Madrid preparing to subsidize bills punitive public services.
Thanks for reading FirstFT Asia. Here’s the rest of the day’s news — Amanda
Five other stories in the news
1. Russia accuses ‘sabotage’ of explosions in northern Crimea Moscow blamed the “sabotage” of explosions in Crimea and claimed Ukraine was behind covert attacks in mainland Russia. The rare reconnaissance provides possible evidence of Kyiv’s heightened ability to strike deep behind enemy lines. Ukraine did not claim responsibility for the attack but warned that Crimea would not be exempt from its attempts to repel Russian forces.
2. Walmart and Home Depot ease recession fears despite lingering inflation Two of the largest US retailers reported resilient consumer spending, helping to ease recession fears amid runaway inflation. Walmart beat earnings expectations and forecast a weaker full-year profit decline than it previously reported. Home Depot reported its highest ever quarterly sales and profit.
3. Odinga rejects Ruto’s victory in Kenya’s presidential election Kenyan presidential candidate Raila Odinga is taking legal action to challenge William Ruto’s narrow election victory amid post-election violence. Odinga has until Monday to challenge the judgment. Despite some scuffles at the national voting center, the streets remained mostly calm.
4. Liz Cheney braces for primary loss after leading Republican charge against Trump Liz Cheney will likely lose the Republican primary in Wyoming to a Trump-backed candidate. The daughter of former Vice President Dick Cheney was vice chair of the congressional panel investigating the January 6 attack on the US Capitol. The primary contest is one of the last before November’s midterm elections and serves as yet another test of Trump’s grip on Republican voters following the FBI’s raid of his Mar-a-Lago estate.
5. Harvard will offer free MBA fees to low-income students Harvard Business School, one of the world’s most prestigious business education providers, will waive the $76,000 annual fee for low-income students. The announcement follows moves by other wealthy US universities to improve financial conditions as tuition fees soar and students suffer from debt burdens.
The day ahead
NATO holds crisis talks with Kosovo and Serbia NATO Secretary General Jens Stoltenberg will meet Kosovo Prime Minister Albin Kurti and Serbian President Aleksandar Vučić in Brussels today amid growing speculation of war between the two countries. Kurti and Vučić will meet tomorrow with the diplomatic branch of the EU.
business profits A number of companies will release their results today as we approach the end of the current reporting season. In particular, Cisco Systems, Target and Tencent will publish their turnover figures today.
Economic data The UK will release July inflation data today. The country is currently in the grip of a cost of living crisis as real wages fall at record rates.
Indonesian independence Indonesia celebrates Independence Day, marking 77 years since the country launched its revolution against Dutch rule.
What else we read
How a banker fighting the Hong Kong ban broke a Wall Street record AMTD Group’s Calvin Choi is soaring after a meteoric rise in prices just weeks after his company went public in the United States. The rise comes as Washington cracks down on U.S.-listed Chinese companies and Choi faces a two-year ban by Hong Kong’s financial watchdog.
EU seeks more lithium, cobalt and graphite in green power push Europe wants to increase its supply of raw materials for clean energy as it seeks ways to end dependence on Russian oil and gas. The European Commission plans to lower regulatory barriers to mining and producing critical materials such as lithium, cobalt and graphite needed for wind farms, solar panels and electric vehicles.
Brazil’s other deforestation Deep in the country’s interior, the conversion of swaths of the once inhospitable Cerrado region to pasture in recent decades has helped transform Brazil into an agrarian powerhouse. But the extent of the encroachment worries environmentalists concerned about threats to the region’s role as a carbon dioxide “sink”.
It’s not always the aggressor who pays In the wake of the #MeToo movement, economists are using real-world data to study incidents of everyday sexual harassment in mainstream workplaces. As with the wealthy and celebrities, they find that it’s not always the authors who pay the full price, with women more likely to change jobs, writes Sarah O’Connor.
Anshu Jain, banker, 1963-2022 The first non-white and non-German to lead Deutsche Bank, Anshu Jain was known for his incisive style. He spearheaded the bank’s bid to take over Wall Street and faced cancer as he did with professional challenges: analyzing the problem, trying to solve it, then moving forward, writes Olaf Storbeck. Jain passed away on Friday.
work and leisure
August is the traditional time to be scarce in the office. So why are so many people still working this month, asks Pilita Clark:
At first I thought I was the only one with an unexpectedly active desktop. But others in the city have the same problem. A friend who had his hopes of a quietly productive August dashed by office activity blames the rise of hybrid working
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