Stock market: Europe closes a recovery plan and Moscow does not pay its obligations

European stock markets tremble, pushed by the draft peace plan between Russia and Ukraine

Russia is unable to pay coupons on bonds due to foreign investors: The countdown has officially begun for what could become a file A huge default that would bring the country to its knees With global repercussions. The Russian Finance Ministry said it had issued a payment order for $117 million owed to holders of Eurobonds, which must be in dollars. But he also acknowledged that the money “may not reach bondholders”. Indeed, some investors have not yet received the amounts due. However, technically there is a 30-day “grace period” which gives until April 15 to avoid the official announcement of default. Can mean bankruptcy, will trigger state risk insurance contracts, the appearance of unobtainable instant payments Moscow, which will become a pariah of the financial system like Argentina. New earthquake for an economy already suffocated by Western sanctions, 10% inflation and the costs of the war in Ukraine. But, it is also possible, for the global economy. Moscow’s foreign currency debt alone amounts to $150 billion. And since, even before the war, Russia had an investment-grade (and therefore non-speculative) rating, these bonds are in the hands of investment funds all over the world, insurance companies, pension funds: not only hedge funds. A time bomb that represents a public debt of only 40 billion: the bulk is made up of bonds from Russian companies popular with Western investors such as Gazprom (more than 28 billion), Russian Railways (nearly 5 billion), Rosneft and Lukoil (2.5 and 2.3 billion, respectively), leading banks like Vtb and Alfa Bank (2.3 and 2.1 billion), Vnesheconombank (3.8 billion), Sberbank (3 billion) . The stock markets paid more attention to the glimmers of a negotiated solution to the war: Milan up sharply (+3.34%), like Paris (+3.68%) and Frankfurt (+3.76%), Btp-bund spreads falling to 150. After all, Russian defaults Kinda contrived: not that Moscow has no money, but that war has spread through the economy, and sanctions seized more than half of Vladimir Putin’s foreign exchange reserves, who responded by banning foreign currencies. Float. For the Russian president, this is the argument for saying that it is the United States and the European Union which have “fallen behind” Moscow: they are the ones who have “really failed”. Even Finance Minister Anton Siluanov, who admitted that the bond payment due in 2023 and 2043 “may not reach the investors”, tried to throw the ball in the opposite court: the payment could have been transferred but the bank holding foreign currency accounts could not pay it across borders, and now it depends on the US authorities. Moscow continues to finance itself at the rate of half a billion a day from gas sales to Europe. It will also have 17 billion in special drawing rights from the International Monetary Fund, which pressure from the United States and the European Union has not yet been able to prevent. But how seriously the risk of insolvency is taken by investors (and is an effective Western leverage to Moscow) is attested to by rating agency Fitch, which warned: a ruble payment “would constitute an event of default “. And it was rounded up to April 2, because even the coupons of Russian Ofz bonds that expired on March 2 did not reach foreign investors. A threat that is beginning to provoke the Russians: after all, these are Putin’s assurances – “the national economy will surely survive” and the chaos of 1998 will return – exposing Moscow’s fears.

On the commodities side, both oil and gas reversed course after a bullish start. Brent fell 0.6% and was below $100 (99.3) a barrel. West Texas Intermediate crude is down 0.5% and approaching $96 a barrel. The price of gas in Amsterdam falls to 110 megawatt hours, after opening at 117, down 4.13%. In London, the price is 266 pence per Mmbtu Thermal Unit with a decline of 3%, and among metals, nickel has returned to circulation in London, losing 5%. Trading lasted for a few seconds and due to a technical issue with a 5% downside price cap, trading was suspended again. On the foreign exchange front, the ruble is recovering. The Russian currency which traded before the war in Ukraine at 75 on the American currency, trades at 100 on the dollar and 110 on the euro which in turn evolves at 1.10 on the dollar.

the pricegold It decreases slightly. The metal with immediate delivery was priced at $1,915, down 0.15%.

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