Wednesday, October 5, 2022
by Linda Noakes
Here’s what you need to know.
OPEC+ heads for a clash with the U.S., banks financing Musk’s Twitter deal face hefty losses, and why residents of a South Korean seaside town got a big surprise
Today’s biggest stories
|A Ukrainian service member holds captured Russian weapons near the town of Bakhmut, Donetsk region, October 4, 2022. REUTERS/Anna Kudriavtseva|
|A South Korean Air Force F-15K fighter jet takes part in a joint bombing drill with the U.S. in this handout picture provided by the Defense Ministry, South Korea, October 4, 2022|
Ethiopia’s government has accepted an invitation by the African Union to participate in peace talks aimed at ending a two-year conflict with rival Tigray forces. The conflict has killed thousands of civilians and uprooted millions.
|An OPEC sign is seen as OPEC+ meets in Vienna, October 5, 2022. REUTERS/Lisa Leutner|
BUSINESS & MARKETS
OPEC+ looks set for deep cuts to its oil output targets when it meets today, curbing supply in an already tight market despite pressure from the United States and others to pump more. The potential cut could spur a recovery in oil prices that have dropped to about $90 from $120 three months ago.
Elon Musk is proposing to proceed with his original $44 billion bid to take Twitter private, calling for an end to a lawsuit by the social media company that could have forced him to pay up, whether he wanted to or not. Musk’s U-turn could not have come at a worse time for the banks funding a large portion of the $44 billion deal and they could be facing significant losses.
A steepening drop in euro zone business activity last month will likely put paid to any hopes the currency union avoids recession, just as elevated inflation puts pressure on the European Central Bank to act, a survey showed. British businesses last month suffered the sharpest contraction in activity since early last year, although the downturn was a little less severe than first estimated.
Faced with mounting evidence that loose U.S. monetary policy contributed to the breakout of inflation last year, the Federal Reserve now faces the risk it jumped too far the other way with its plans to fight price pressures through continued aggressive interest rate hikes even as the world economy wobbles.
Financial messaging system SWIFT has laid out its blueprint for a global central bank digital currency network following an eight-month experiment on different technologies and currencies. SWIFT said its trial resembled a bicycle wheel where 14 central and commercial banks in total connected spoke-like into its main hub.