World News Archives

Russia Hit with New Oil Sanctions

Written by IntaCapital Swiss on October 29, 2025. Posted in News & Reports. Leave a Comment

Last week on 22^nd of October, in Washington D.C, the U.S. Department of the Treasury’s Office of Foreign Asset Control (OFAC) announced that further sanctions on major Russian oil companies were being imposed due to Russia’s lack of serious commitment to a peace process to end the war in Ukraine. Experts advise that the aim of this increased pressure on Russia’s energy sector is to weaken President Putin’s ability to generate revenue for the war effort and to sustain an already fragile economy.

The sanctioning of both Rosneft and Lukoil* by the United States coincided with the EU’s 19^th package of sanctions on Russia, which included a ban on Russian LNG (liquefied natural gas) imports. The United Kingdom had also added to its own sanctions list the previous week.

Rosneft – A vertically integrated energy company specialising in the exploration, production, refining, transportation, and sale of petroleum, petroleum products, and LNG. The Russian Government owns around 40.4% of the company, with the Qatar Investment Authority also holding a significant stake.

Lukoil – Engaged in the exploration, production, refining, marketing, and distribution of oil and gas across Russian and international markets. Lukoil is privately owned, with its founder, Vagit Alekperov, holding approximately 28.3%.

President Trump’s sanction package targeting Rosneft and Lukoil has triggered repercussions in the world’s two most populated nations, India and China. Experts report that a number of oil companies in both countries have begun cancelling orders ahead of the sanction deadline of 21^st November 2025, fearing potential retaliation from the White House for sanction busting. Analysts estimate that Russia exports between 3.5 and 4.5 million barrels of oil per day to Asia, with a significant portion coming from the newly sanctioned firms. However, experts warn that once the deadline passes, exports of between 1.4 and 2.6 million barrels per day to China and India could completely dry up.

Under OFAC’s latest rules, U.S. secondary sanctions may also be imposed for providing material support to Lukoil or Rosneft, or for operating within Russia’s energy sector. In essence, sanctions can be triggered by any significant transaction involving these companies. The threat of being banned from the U.S. financial system is expected to deter potential sanction busters from engaging in new or existing business with either firm.

The EU’s new sanctions package will prohibit the import or transfer, directly or indirectly, of Russian LNG from 25th April 2026, except for long-term contracts entered into before 17th June 2025. The EU’s implementation has been slower than that of the U.S. and UK due to its greater dependence on Russian LNG.

Meanwhile, both the European Union and the United Kingdom continue to target vessels operating within the so-called shadow fleet*, which is used to transport Russian oil and bypass Western sanctions. The UK has also imposed asset freezes on several companies supplying Russia with critical electronics for missiles and drones. Additionally, the EU has identified 45 new companies and entities that are directly supporting Russia’s war effort by helping to circumvent export restrictions on advanced technology.

Shadow Fleet – A collection of around 45 ageing, uninsured oil tankers used by Russia to export oil while evading Western sanctions. These vessels typically have opaque ownership structures, often sail under false flags, and operate outside the Western financial system. This enables Russia to sell oil below the Western-imposed price cap of USD 60 per barrel, designed to limit Moscow’s export revenues.

The latest round of sanctions is expected to result in increased enforcement activity and greater regulatory scrutiny, particularly if the United States maintains its renewed aggressiveness. With relatively short wind-down periods for both Lukoil and Rosneft, sanctioning authorities will need to act swiftly and with heightened diligence. Strong cross-border coordination among multinational organisations will be essential to ensure a robust and effective sanctions compliance framework.

President Trump and the Tariff Trade Wars

Written by IntaCapital Swiss on October 29, 2025. Posted in News & Reports. Leave a Comment

On Thursday, 23rd October, President Donald Trump announced that he was halting all trade negotiations with Canada, blaming an advertisement funded by the Ontario Government, which cast negative connotations on his tariff plans by featuring the voice of former President Ronald Reagan. The advert used excerpts from a 1987 speech in which President Reagan criticised tariffs as outdated while defending the principles of free trade. Last year, the United States and Canada exchanged in excess of USD 900 billion in goods and services, and the cancellation of trade talks by President Trump has cast a cloud of uncertainty over bilateral trade relations between the two nations.

President Trump’s announcement, made via his Truth social media stated:

“Tariffs are very important to the National Security and economy of the U.S.A. Based on their egregious behaviour, all trade negotiations with Canada are hereby terminated”.

Experts suggest that the President is convinced the Ontario Government timed the adverts (which have been shown more than once) to coincide with a case in the Supreme Court challenging the legality of the tariffs, and to sow discord among Republican supporters. Canada’s Prime Minister, Mark Carney announced on Friday that the country was ready to resume trade talks with the United States and would pause the advert on Monday in the hope that U.S. trade officials would return to the negotiating table.

In a surprise move, President Trump predicted that Brazil and the United States may be able to “pretty quickly” strike a trade deal, despite having imposed punitive tariffs on Brazil earlier this year over the prosecution of former ally Jair Bolsonaro. Brazilian Foreign Affairs Minister Mauro Vieira stated that he hoped sanctions on Brazilian officials would be lifted and that he expected trade negotiations to be completed within weeks.

President Trump is attending the 47^th ASEAN Summit and Related Summits in Kuala Lumpur from 26^th – 28^th October 2025, where he has held several meetings with regional leaders concerning tariffs. He is seeking to increase access to markets for U.S. agricultural goods and, crucially for his administration, to secure access to critical minerals and rare earth sectors. Such framework agreements will include exemptions from tariffs on key exports to the United States for several Southeast Asian countries, including Cambodia, Malaysia, Thailand, and Vietnam.

The United States has released a framework for a trade agreement with Vietnam, which will offer zero tariffs on selected products while granting preferential treatment by the Vietnamese Government to U.S. agricultural and industrial exports. A White House Statement said the agreement is expected to be finalised in the coming weeks, adding that both countries had agreed commitments on investment, digital trade, and services, though further details were not provided.

It has also been announced that a reciprocal trade framework between the United States and Thailand has been reached, under which the U.S. will maintain a 19% tariff on Thai exports, while identifying certain products where tariffs could be reduced or removed. Thailand will eliminate tariffs on approximately 99% of U.S. exports, covering industrial, food, and agricultural products. Both countries also signed a pact giving U.S. companies preferential access to rare earth minerals, crucial in manufacturing high-tech products such as jet engines and semiconductors. However, information released so far remains limited and given that China controls around 90% of the rare earth market, the overall impact for the U.S. may be modest.

Malaysia, as host of the 47^th ASEAN Summit, has signed a Joint Trade and Critical Minerals Agreement with the United States aimed at improving trade across Southeast Asia and countering China’s tightening control of rare earth mineral exports. Analysts say the agreement gives Malaysia an advantage in accessing the U.S export market and, in return, Malaysia will develop its rare earth and critical mineral sectors with U.S firms, while addressing barriers that affect investment, digital trade and services. Furthermore, Malaysia will commit to purchasing products from U.S companies and restricting the export of any U.S. items on the unauthorised list.

Finally, China and the United States are both keen, according to experts, to avoid further escalation of the current trade war, and have shown signs of progress. After China increased export controls on rare earth and critical minerals, President Trump responded by imposing China with 100% tariffs on Chinese goods. However, on 26^th October, it was announced that U.S. and Chinese trade and economic officials had reached an agreement on a framework for bilateral trade, and President Trump confirmed that he expects to finalise a trade deal with President XI Jinping in the coming days. Only time will tell whether the United States and China can reach a sustainable long-term agreement.

The Global Banking System at Risk from the USD 4.5 Trillion Private Credit Market

Written by IntaCapital Swiss on October 22, 2025. Posted in News & Reports. Leave a Comment

Senior Wall Street figures have voiced growing concerns that the global banking system could be facing serious risks from the USD 4.5 trillion private credit market. The main worries centre on risky lending practices, potential contagion, and a lack of transparency, all underscored by recent high-profile bankruptcies. Because the private credit market operates outside traditional banking regulations, it tends to carry higher leverage and riskier loans, which could spill over into the wider financial system and impact banks and investment firms around the world.

The sense of unease across Wall Street has deepened amid fears that large-scale defaults in the private credit market could trigger a broader systemic shock. Experts note that global credit has expanded rapidly over the past decade, with particularly sharp growth in private credit. Senior finance figures explain that this wave of expansion typically starts with private credit, then extends into high-yield bonds* and leveraged loans**, both of which amplify financial risk

*High Yield Bonds – In finance, a high-yield bond is one rated below investment grade by credit agencies. These bonds offer higher returns but carry a greater risk of default. They are often issued by start-ups, highly leveraged companies, capital-intensive industries, or so-called “fallen angels”, firms that once held investment-grade ratings but have since dropped below the threshold.

**Leveraged Loans – These are high-risk loans granted to companies with weak credit histories or heavy debt loads. Because of the elevated risk, they come with higher interest rates. There’s no strict definition for what constitutes a leveraged loan, but they are generally identified by low credit ratings or large margins above benchmark interest rates, such as floating-rate indexes that determine how loan costs fluctuate over time.

Investor anxiety intensified recently when two major car parts suppliers in the private credit space, both carrying multi-billion-dollar debts, declared bankruptcy amid fraud allegations. At the same time, two regional banks revealed they were sitting on several irrecoverable bad loans. The news sparked a sharp sell-off across both U.S. and U.K. stock markets last week. Analysts said many investors fear this could be just “the tip of the iceberg,” prompting a rush to safer assets.

In the U.K., data showed that within the FTSE 100, investors sold off shares in Schroders and ICG, both seen as particularly exposed to the private credit market. Banking stocks also fell sharply, reflecting concerns that traditional lenders are more deeply tied to this market than previously thought. The International Monetary Fund (IMF) recently warned that global banks’ exposure to private credit, often dubbed the “shadow banking sector”, amounts to around USD 4.5 trillion, a figure larger than the entire U.K. economy. The IMF also cautioned that as many as one in five banks could face significant trouble if the sector deteriorates further.

IMF Managing Director Kristalina Georgieva has publicly admitted to “sleepless nights” over the potential risks stemming from non-bank financial institutions. Financial commentators say her concerns arise from the lack of regulatory oversight in this sector, where non-bank lenders can take on risks that traditional banks would likely avoid. The absence of third-party scrutiny only compounds the problem, leaving markets in the dark about the true scale of exposure. The world learned painful lessons during the 2007–2009 global financial crisis, and with the collapse of Silicon Valley Bank in 2023 still fresh in memory, few are willing to rule out another shock on the horizon.

Silver Soars Above $50 as Squeeze Hits London Silver Market

Written by IntaCapital Swiss on October 15, 2025. Posted in News & Reports. Leave a Comment

On Thursday, 9th October, silver breached the $50 per ounce mark for the first time since the 1980s, evoking memories of the Hunt brothers*, before continuing its climb to reach a high of $51.23 per ounce. The surge in silver prices, already up by around 70% since the start of the year, has been driven by investors rushing to safe-haven assets such as silver, gold, and other precious metals, as well as by a surge in demand from India. Another key factor is silver’s critical role in industrial markets, with wind farms and solar panels now accounting for nearly half of global demand.

*Hunt Brothers – Nelson Bunker Hunt and his brother were Texas oilmen whose worldview was shaped by a sense that the odds were stacked against them. With inflation at 15%, scrutiny from the IRS (Internal Revenue Service), and tensions with Muammar Gaddafi, they felt under siege. After refusing Gaddafi’s demand for half the profits from their Libyan oil fields, the Hunts saw their assets seized. Determined to protect their wealth, Nelson Hunt decided to hedge against inflation by hoarding silver, leading the brothers to begin one of the most infamous market plays in modern history.

Experts note that Nelson Hunt was not a typical “buy and sell” trader. Out of paranoia and conviction, he and his brother began stockpiling silver in 1973, when it was priced at just $2 per ounce. By 1980, the price had reached $45 per ounce and was still rising. The Hunts had amassed around 200 million ounces of silver, and the craze spread. People sold family heirlooms, thieves targeted silverware, and anything containing silver was melted down, all of which pushed prices even higher.

The fallout prompted regulators to act. On 7th January 1980, both **COMEX and the Chicago Board of Trade introduced emergency measures, including higher margin requirements. Experts at the time said the new rules effectively outlawed further silver buying, allowing only liquidation contracts. Prices soon collapsed from a high of $49.45 per ounce to $16.60 by 18th March that year. After years of legal battles and financial manoeuvring, the Hunt brothers eventually lost everything.

** COMEX – The Commodity Exchange, a division of the CME Group, is a global derivatives marketplace that allows clients to trade futures and options across major asset classes. It also provides clearing and data services and serves as the main exchange for trading metals such as gold, silver, copper, and aluminium.

Fast-forward to the 21st century, and the London Silver Market is experiencing what many describe as a historic squeeze. As prices continue to rise, the mismatch between supply and demand has become so severe that a global hunt for bullion is underway.

Some traders are even booking space on commercial flights from New York to London (a costly method) to transport silver bars and take advantage of the $1.20 per ounce arbitrage opportunity seen on Monday this week. The shortage of silver bars has been fuelled by several factors, starting with Donald Trump’s threat to impose tariffs on the metal. This prompted a mass exodus of bars across the Atlantic as traders rushed to beat potential levies.

Other contributing factors include a spike in demand from India, increased debasement trading (where investors sell currencies and buy safe-haven metals as global debt climbs), and production shortfalls among miners who are failing to keep pace with demand. Additionally, large volumes of silver are held in vaults underpinning ETF trading, meaning they cannot easily be sold or leased. The leasing market has become so tight that traders holding short spot positions are paying sky-high rates to borrow silver to roll over their contracts.

Market analysts in London believe that natural momentum will eventually see silver bars flow back to the city from reserves elsewhere, helping to ease the shortage. However, traders in New York remain hesitant to export silver to London, as the US government lockdown could cause customs delays, potentially costing millions in missed opportunities. There is also widespread caution over President Trump’s potential tariffs on silver, which is under investigation as a critical mineral under Section 232. Should the US decide not to impose tariffs, part of the squeeze in London could ease. The coming four to six weeks will be crucial in determining how this tightness in the London silver market unfolds.

Precious Metals and Bitcoin Rise on the Back of Debasement Trades

Written by IntaCapital Swiss on October 8, 2025. Posted in News & Reports. Leave a Comment

A financial strategy in which investors allocate funds to assets such as Bitcoin and gold as a hedge against the devaluation of fiat currencies is known as a debasement trade. Key drivers include rising sovereign or government debt, geopolitical instability, and inflation. Experts note that investors have been selling major currencies and moving towards alternative assets such as gold (both physical and ETF), silver, Bitcoin, and even certain collectables such as Pokémon cards, which recently reached an all-time high.

Data released indicates that investors have added momentum to debasement trades due to growing concerns over fiscal challenges affecting many of the world’s largest economies, several of which are struggling under an expanding burden of debt. Analysts also highlight that political instability within these economies has further encouraged investors to pursue debasement hedges by purchasing gold, Bitcoin, and other crypto assets, particularly as the US dollar, Japanese yen, and euro face mounting fiscal and political pressures.

Experts suggest that one of the main reasons investors are rebalancing their portfolios is the rising debt levels in countries such as the United States, Japan, and across the Eurozone. These nations are finding it increasingly difficult to manage their debt piles, which in turn has enhanced the appeal of debasement trades. Gold opened today, surpassing USD 4,000 per ounce, a new record, as it continues to demonstrate its role as a safe haven amid economic and geopolitical uncertainty. Recent data also revealed that Q3 saw the largest global gold ETF monthly inflow on record at USD 17 billion, resulting in the strongest quarter ever, totalling USD 26 billion.

On the Bitcoin front, the cryptocurrency has risen steadily over the past year, driven largely by President Trump’s introduction of crypto-friendly legislation. However, the United States is grappling with a massive debt load, standing at USD 37.88 trillion as of the close of business on 30th September 2025 and still climbing. The ongoing US government shutdown has also acted as a strong buy signal for Bitcoin, much of it linked to debasement-related transactions.

Indeed, on Sunday 5^th October Bitcoin reached USD 125,689, surpassing its previous record set on 14^th August this year, driven primarily through Bitcoin ETFs. Data shows the coin is up 30% for the first three quarters of the year. Yesterday, 6^th October, Bitcoin hit another record of USD 126,279 with the US dollar having weakened approximately 30% against the cryptocurrency this year. Several Wall Street analysts now predict Bitcoin will reach between USD 160,000 and USD 180,000 by the close of business on 31st December 2025.

Analysts advise that investors engaging in or considering debasement trades need only to look at France for an example of why hedging has become increasingly common. Newly appointed Prime Minister Sebastian Lecornu lasted only 26 days in office, surpassing the brevity of former UK Prime Minister Liz Truss’s record by 23 days. The French leader did not even manage to deliver an inaugural address to parliament, let alone present a budget that could achieve cross-party support.

Commentators suggest that debasement trading will continue an upper trajectory, as Europe contends with instability in France and beyond. Japan has also unsettled markets with a newly elected pro-stimulus Prime Minister and concerns over further debt expansion. In the United Kingdom, the Chancellor is preparing a budget that many expect to be highly contentious. Meanwhile, in the United States, already burdened by an out-of-control debt pile, a prolonged government shutdown, and a President seeking to assert influence over the Federal Reserve, the pressure continues to mount.

Is The Russian Economy Completely Underpinned by Its War Machine?

Written by IntaCapital Swiss on October 1, 2025. Posted in News & Reports. Leave a Comment

Experts on the Russian economy suggest that since the beginning of the invasion of Ukraine by Russia, more resources such as financial, human, and production, have been redirected to Russia’s military war machine, and today several economic commentators with expertise in this arena are saying that the war machine is now underpinning the Russian economy. The prioritisation of military spending over everything else is essentially stifling innovation and damping down any long-term growth prospects.

Indeed, since February 2022, every resource has channelled funds into the military machine for tanks, drones, bullets, and missiles; the list is endless. SIPRI (Stockholm International Peace Research Institute) has estimated that for 2025, Russia’s total military expenditure accounts for circa 7.2% of GDP, and other similar focused institutions suggest that the war machine accounts for circa 43% of the Russian government’s budget.

Analysts suggest that even if the war with Ukraine were to end tomorrow, it is feasible that Russia’s economy would always remain on a war footing, as years of massive investment in the war machine have sucked in literally hundreds of thousands of workers and transformed their factories into military production. One example of this is that before the invasion of Ukraine on February 24^th, 2022, Russia had planned deliveries for 2025 of 400 armoured vehicles; today it is shipping circa 4,000 armoured vehicles. Experts argue that, on one hand, this surge in production has prevented the economy from shrinking, but on the other hand, it has also prevented it from returning to a pre-war economy—something that could be extremely perilous.

Prior to February 2024, Russia’s economy combined relatively stable private and civilian industries with the export of natural resources. The manufacturing base enjoyed the capacity for modernisation, even though it relied on imported components and technology. Even after the COVID-19 pandemic, companies were in the process of reevaluating their global markets. The economy was being managed as prudently as possible, with the auto industry producing over 1.7 million vehicles per year, military spending not exceeding 3-4% of GDP, and even a budget allocated for infrastructure.

Today, analysts and experts are painting a very bleak picture of the Russian economy and its deep ties to the war machine. Military spending has reached unprecedented levels, colliding with an import shortage and limited production capacity, which has, in turn negatively impacted inflation. To put the brakes on price increases, inflation has remained in double-digit figures for over a year. Meanwhile, revenue from commodity exports has dropped due to sanctions and discounts, prompting the government to raise income taxes, implement quasi-taxes such as windfall taxes, and increase export duties. As a result, many financial commentators suggest that, with government expenditure heavily skewed in favour of the military, a return to a pre-Ukraine economy is virtually impossible.

So, what’s next for the Russian economy? China continues to support the Russian economy by purchasing sanctioned LNG (Liquefied Natural Gas). In fact, it was recently reported that a fourth tanker carrying LNG from the sanctioned Arctic LNG2 project arrived and discharged its cargo at China’s Beihai LNG terminal. The Arctic LNG2 project was intended to be Russia’s largest LNG plant, producing 19.8 metric tons per year. However, sanctions have severely hindered the prospects of reaching such output.

According to a number of experts, it seems plausible that despite rhetoric to the contrary from the Kremlin and several meetings with President Trump and his officials, President Putin has no immediate intention of ending the war with Ukraine. In fact, keeping the country on a war footing would allow the military machine to prop up the economy, confirming that it has little choice but to continue producing goods central to the ongoing conflict. Experts in military affairs suggest that Putin views a military stance against the West as one of the key reasons for maintaining defence production.

Furthermore, the defence industry and the economy will benefit from arms sales to Russia’s allies, such as China. Russia is also the world’s second-largest supplier of arms behind the U.S., and has once again participated in arms fairs across the Middle East, Africa, China, and India. Notably, arms fairs in Brazil (1^st – 4^th April 2025) and Malaysia (20^th-24^th May 2025) showcased Russian arms for the first time in six years. It is therefore reasonable to assume that President Putin sees global arms sales as a boon for the economy, long after the current war with Ukraine ends.

However, sanctions on the Central Bank of Russia have been significantly reduced, curtailing its ability to borrow from international markets, and hindering the economy’s growth potential. Recently, the central bank admitted that the economy is struggling, and official data released shows GDP contracting. Analysts report that real GDP is now 12% lower than it would have been otherwise. Only the coming months and next year will reveal what is truly happening in the Russian economy, but it is without a doubt totally tied to the Russian military machine.

A Brief Overview – The Global Outlook for the Remainder of 2025

Written by IntaCapital Swiss on August 27, 2025. Posted in News & Reports. Leave a Comment

The central banks’ banker BIS (Bank for International Settlements) recently said that fractious geopolitics and trade tensions have exposed deep fault lines in the global financial system and the then head of the BIS, Augustin Carstens, (retired 30th June 2025) said the U.S.-driven trade war and other policy shifts were fraying the long-established economic order. He went on to say the global economy is at a pivotal moment entering a new era of heightened uncertainty, which was testing public trust in institutions, as well as central banks.

Today, experts suggest that for the remainder of 2025 there will be a slowdown in economic growth characterised by falling inflation, however analysts point to sticky inflation in the United States, along with persistent risks emanating from geopolitical tensions, together with increasing trade tensions which could perhaps result in a more negative impact on the global economy. Indeed, some analysts who were expecting a soft landing for the global economy have retracted these opinions as said soft landing has suddenly disappeared from view, as long-established trade relationships began to crumble with the announcement back in April this year of higher-than-expected U.S. trade tariffs.

Some financial news outlets have suggested that emerging and long-standing structural challenges are being faced by the global economy, and, for over 20 years, productivity growth has been on a downward path in many of today’s advanced economies. Furthermore, with the introduction of Trump’s tariffs this could accentuate the decline as further pressure is placed upon supply chains who are also facing current geopolitical tensions (the ongoing invasion of Ukraine by Russia, Middle East tensions between Israel, Iran and Gaza, and the potential invasion of Taiwan by China) that could be the driver of more frequent supply shocks.

On the global inflation front, analysts suggest that inflation is set to decline, though at a divergent pace, with some economies enjoying further declines, whilst others, especially the United States, face possible increases due to tariffs. However, some forecasters are at odds with each other with the IMF (International Monetary Fund) predicting a steady global decline from 2024 to 2025, and one major Wall Street player suggesting a global core inflation increase for the remainder of 2025.

Some financial commentators have even pointed the finger at the President of the United States as a danger to the global economy, not only for the remainder of 2025 but potentially for the rest of his term in office. Indeed, his continued attacks on the Chairman of the Federal Reserve, Jerome Powell, and his attacks on the Federal Reserve itself for not reducing interest rates could threaten global financial stability. Some experts have pointed out the incumbent President was not elected due to his extensive knowledge of interest rates and all the attendant data that aids central banks in their decisions to hold, drop, or increase rates. The fear is that if politicians and in this case a U.S. president takes effective control of the Federal Reserve for their own political aims, this could set a dangerous precedent for other central banks where monetary policy is subject on a global basis to political interference.

There are a number of negative factors that could affect the global economy by the end of this year. Experts suggest that apart from geopolitical tensions, regional conflicts and trade wars, there is the negative impact of high public and private debt possibly exacerbated by higher interest rates, together with persistent/sticky inflation in some advanced economies along with stagnant productivity and an ageing population which can all have a negative effect on sustainable economic growth. Interestingly, as of today, India has been hit by a doubling of tariffs (for buying Russian oil) from 25% to 50%. There is no agreement in sight therefore India could serve as a template by the end of the year and into 2026 as to what impact tariffs have on their economy.

How Tariffs are being Weaponised by President Trump

Written by IntaCapital Swiss on August 27, 2025. Posted in News & Reports. Leave a Comment

For years, international trade was as tranquil as it comes and within the offices of the WTO (World Trade Organisation) on the banks of Lake Geneva worked the trade lawyers and trade economists unencumbered by the problems of today. Sadly, the twin forces of geo-economic fragmentation and geo-political confrontation have undermined the balance of the global trade regime and what we witness today is the weaponisation of tariffs*. The most pronounced effect of tariffs in the present day has come from the White House with President Trump’s “Liberation Day” on 2nd April this year, where he announced punitive tariffs across the board on all of the United States’ trading partners.

*Tariffs – are defined as a tax on imported goods levied by governments typically as a percentage of the product’s value. It is designed to protect domestic industries, raise government revenues, or serve as a political tool in trade negotiations. Importers pay the tax which increases the cost of foreign products, potentially making domestic alternatives more attractive to consumers.

The return of Donald Trump to the White House has transformed the utilisation of tariffs into instruments of both economic and political coercion and in the process has reignited economic nationalism. Some experts argue that the weaponising of trade (via tariffs) is where existing trade relations are manipulated to advance political and geo-political objectives, the ultimate goal being to push another government to change its policies in favour of the country wielding the tariffs. The biggest offender in the new tariff war is the United States and as seen below, they have successfully employed tariffs to bend the will of certain governments to their way of thinking.

On the domestic front, (Trump’s efforts are not just confined to foreign governments), he is reshaping domestic supply chains and even threatening iconic power price points. However, there are downsides as the 50% increase in tariffs on imports of aluminium and steel*, (which came into effect on 3rd June 2025) have increased production costs for such brands as Home Depot, Walmart, Target, Lowes Proctor & Gamble and AriZona Iced Tea. Famed for its 99 cents cans AriZona sources most of its aluminium domestically, but tariffs on imported aluminium/steel distort the broader market increasing prices for all producers. The tariff will increase prices which will be passed on to customers, and in the case of AriZona this will undercut a key brand identity that has endured for decades.

*Aluminium and Steel Tariffs – The tariff on these two metals doubled to 50% on June 3rd this year with some counties getting exemptions and paying the original tariff of 25%. The impact of this increase in the US has potentially led to higher consumer prices and fewer jobs in downstream industries, including higher domestic commodity prices and supply chain disruption. Experts say the main reason for these tariffs are national security under section 232 of the Trade Expansion Act 1962 to protect domestic industries from unfair foreign competition and to help correct trade deficits.

Elsewhere on the domestic front on the 6th of this month President Trump announced a plan to impose a 100% tariff on imported semiconductors*, with exemptions for companies that commit to manufacturing in the United States. The White House framed the policy as national security concerns with over-reliance on Asian countries such as Taiwan and South Korea for critical technology. This move was not about trade imbalances, it was about forcing multinational companies to expand manufacturing with the borders of the United States. Interestingly, Apple has been exempt from these tariffs after pledging to invest USD 600 Billion into U.S. based chip production and related infrastructure. This has now set a precedent where tariff relief can be bought through commitments that serve President Trump’s domestic industrial goals.

*Semiconductors – is a material with electrical conductivity that falls between that of a conductor (e.g., copper) and an insulator (e.g., glass). Their unique ability to be controlled make them essential components of modern electronics including computer chips, transistors and diodes.

Under the current administration in the White House, experts conclude that traditional legal frameworks are being bypassed with tariffs which were originally imposed on China, Mexico and Canada by invoking the IEEPA (International Emergency Economic Powers Act) citing security reasons. This is a classic example of weaponising tariffs in order for Donald Trump to bend counties to his will. It did not work with China but initial reactions from Mexico and Canada showed that Trump had certainly won the initial battle but Mexico has had a stay of execution and Canada and the U.S. are currently in negotiations.

Elsewhere in Europe, the member countries have agreed to increase defence spending to 5% of GDP for NATO in line with the wishes of President Trump. However, analysts suggest that the invasion of Ukraine by Russia on 24th February 2022 prompted the European Union members to raise defence spending but interestingly it was not agreed upon for just over three years when President Trump introduced punitive tariffs.

In another example of weaponising tariffs, on 6th August President Trump issued Executive Order “Addressing Threats to the United States by the Government of the Russian Federation imposing additional tariffs, currently 25%, on Indian Imports (circa USD 81.4 Billion 2023). Experts suggest that India has been targeted because of their direct and indirect purchases of Russian oil (averages a 5% discount), and now the Indian tariff is 50% on most goods imported to the U.S. which is seen as a penalty for facilitating Russia’s oil trade. However, the White Hopes the weaponising of tariffs against India will hopefully persuade them to reduce their dependency on Russian oil. Also, in the week ending 25th July 2025, the White House agreed tariff deals with Japan, Indonesia and the Philippines; granting them lower rates than previously threatened in exchange for them to sign up to national security commitments, the verbiage of which was somewhat opaque.

Conclusion

President Trump has shown even his closest allies are not immune from weaponised tariffs and neither are historical neutral trading partners such as Switzerland who were recently hit with a 39% punitive tariff on Swiss goods, mainly pharmaceuticals, watches and luxury

goods. It appears that currently no country is safe from the Trump trade war machine which uses tariffs as a blunt instrument to beat other countries into submission.

In his second term, Donald Trump has elevated tariffs from a traditional economic safeguard to an overt instrument of political leverage. Whilst tariffs have long been used to protect domestic industries the current approach is far more aggressive as they are being imposed and lifted not purely on economic grounds, but as bargaining chips in corporate negotiations and diplomatic manoeuvres.

Emerging Markets Debt Could Potentially Hit Record Sales in 2025

Written by IntaCapital Swiss on July 9, 2025. Posted in News & Reports. Leave a Comment

Experts in emerging market debt advise that global issuance volumes in this sector year-on-year were up 20% for Q1 and Q2 for 2025, with issuances growing particularly quickly from the corporate sector. The boom in debt sales have defied missile attacks, an oil market with gyrating prices, and US policy, and tariffs putting a strain on global trade, resulting in a major increase in demand for local bonds who are having their best Q1 and Q2 in 18 years. White House policy has seen the greenback fall circa 11% this year, which has led to a fall in investor confidence resulting in an index of emerging market local debt to return in excess of 12% in the first half of 2025.

Regarding the fall in the value of the US Dollar, experts suggest that this has sent fund managers, asset managers, and the rest of the money managers to look elsewhere for better returns, and as a result, the markets have seen a surge in demand for fixed-income assets in emerging market currencies. Data released shows that hard currency bonds are only up 5.4% in the first half of this year as opposed to 12% as mentioned above in the emerging market arena, all this against the backdrop of the US Dollar having its worst performance since 1970 and falling against 19 of 23 of the most traded emerging market currencies.

Figures released by EFPR data (formerly known as Emerging Portfolio Fund Research) show circa USDD 21 Billion (an unprecedented amount) flowing into EM-debt funds, with some Latin American bonds returning some considerable gains. For example, some Brazilian government bonds have returned in excess of 29% whilst local bonds from Mexico (known as Mbonos) have generated a gain of 22%. Elsewhere, experts suggest that Ghana (Africa’s top gold producer) will, due to short-term borrowing costs falling to their lowest level in three years, resume domestic bond sales later this year.

The following is a part overview of data released regarding the total return year-to-date on emerging market bonds, Brazil Notas de Tesouro Nacional Serie F – 20.2%, Brazil Letras do Tesouro Nacional – 26.0%, Mexican Bonos – 21.7%, Poland Bonds – 19.9%, Hungary Bonds – 19.1%, Czech Republic Bonds 17.8%, Mexican Cetes – 17.4%, Nigeria Bonds – 15.8%, Egypt Bonds 15.0%, Romania Bonds – 14.9%, Taiwan Bonds – 13.8%, South African Bonds – 13.2% and Colombian TES – 12.8%.

Since the beginning of the year, data released shows emerging markets companies and governments having sold USD 331 Billion in debt in hard currencies such as the greenback and the Euro. However, not all future roads to emerging markets fixed income products are paved with gold, as tariff increases may yet put a dent in some country’s ability to issue new bonds. Donald Trump will be reviving tariff targets in the second week of this month, indeed, yesterday the White house announced that letters had been sent to 14 countries informing them new tariffs will be enforced on 1st August this year. The president also has stressed that he will put an additional 10% tariff on any country aligning themselves with “the Anti-American policies of BRICS*”, confirming “There will be no exceptions to this policy”.

*BRICS – Is an intergovernmental agency and is an acronym for Brazil, Russia, India, China, (all joined 2009) followed by South Africa in 2010 as the original participants. Today, membership has grown to include Iran, Egypt, Ethiopia, and the United Arab Emirates and Saudi Arabia, with Thailand, and Malaysia on the cusp of joining. Russia sees BRICS as continuing its fight against western sanctions and China through BRICS is increasing its influence throughout Africa and wants to be the voice of the “Global South”. A number of commentators feel as the years progress, BRICS will become an economic and geopolitical powerhouse and will represent a direct threat to the G7 group of nations. Currently this group represents 44% of the world’s crude oil production and the combined economies are worth in excess of USD28.5 Trillion equivalent to 28% of the global economy.

It is believed by experts that the capture of the “Global South” encompasses all of Africa and South America, and BRICS seemed determined to have their own currency and move away from the US Dollar. President Trump views this as a direct threat to the USA and western Europe and will probably follow through on his threats to BRIC aligned countries. However, as President Trump alienates many of America’s traditional allies, BRICS are positioning themselves to replace the United States in the ground that Trump has ceded. The second half of 2025 will be interesting and over the next few months the markets will see if the increase in fixed-income volumes from emerging markets runs out of steam or goes on to new record highs.

Indian Regulators Come Down Hard on India’s Options Market

Written by IntaCapital Swiss on July 9, 2025. Posted in News & Reports. Leave a Comment

Over the last five years, India’s equity derivatives* market has become the largest in the world, with a daily turnover (including options**) of circa USD 3 Trillion. India’s SEBI (the Securities and Exchange Board of India) has recently become concerned regarding this area of the market, where it feels that certain large participants have been allegedly using manipulative practices through the use of sophisticated technology, thereby gaining illegal profits and thus affecting the market’s integrity.

*Equity Derivatives – A derivative is a contract (e.g. futures, forwards, swaps and options) whose value is derived from the performance of an underlying asset for example, bonds, commodities, currencies interest rates, or in this case equities or stocks and shares. An equity derivative is a financial instrument which derives its value from the performance of the underlying stocks or shares and allows investors to gain exposure to the equity market without owning the underlying shares, and are widely used for hedging, speculation, and investment purposes.

**Options – A financial option is a contract that gives the owner or the holder the right but not the obligation, to buy or sell an underlying asset, (in this case equities, stocks) set at a specific price, (the strike price) on or before a certain date (expiration date). Options are a type of derivative meaning their value is derived from the underlying asset.

The SEBI are currently investigating an American company Jane Street Group over alleged irregularities manipulation of trades in the above market, but according to officials, (who wish to remain anonymous) the investigation will expand to cover wider markets. The markets being investigated are the Mumbai based NSE, (National Stock Exchange of India Ltd.’s) flagship gauge, the Nifty 50*, and BSE (Bombay Stock Exchange) Ltd.’s benchmark Sensex**. The SEBI flagged manipulated and fraudulent trades that mainly took place in the Nifty 50’s weekly options contracts and its underlying constituents in the cash market.

*Nifty 50 – This is India’s leading stock market index and represents the performance of the 50 largest and most liquid companies listed on the NSE. It serves as a benchmark for the Indian equity market and is used by investors and analysts to gauge market trends and the overall health of the Indian economy.

**BSE Sensex – Sensex stands for Stock Exchange Sensitive Index and is one of the oldest indices of India and consists of 30 stocks which are listed on the BSE and represent some of the largest corporations which are also the most actively traded stocks. The BSE is allowed to revise the listing periodically and this usually takes place twice a year in June And December. Sensex is crucial to investors as it gauges market movements and aids understanding in the overall sentiment of the economy and industry-specific developments.

Last week, on Friday, July 4th, 2025, the SEBI through an interim order announced they would be seizing Rupees 48,4 Billion (USD 570 Million) from Jane Street in what they said was unlawful gains made by the company. In consequence, and after an in-depth investigation, the SEBI has barred four Jane Street entities from accessing its securities markets including the confiscation of the aforementioned rupees. Furthermore, the SEBI have accused Jane Street of adopting an “Intraday Index Manipulation Strategy” whereby in early day trading the company aggressively bought constituent stocks and futures thereby pushing up the index, followed by aggressive selling later in the day where the trades were reversed.

The SEBI concluded that the trading actions employed by Jane Street lacked any economic rationale and were designed specifically to artificially move index levels to benefit their trading positions whilst at the same mislead other market participants. Headquartered in New York, Jane Street Capital employs more than 2,600 people in six offices in New York, London, Hong Kong, Singapore, Amsterdam, and Chicago and trades a broad range of asset classes on more than 200 venues in 45 countries. The company totally refutes the allegations.

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