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El Pais reports that Spain has closed its airspace to US aircraft involved in the Iran war.
Spain has closed down its airspace for?U.S. Spanish newspaper El Pais, citing military source, reported that Spain has closed its airspace to?U.S. El Pais said that the closure of Spain's airspace does not include emergency situations. The Spanish Ministry of Defence did not respond immediately to a comment request. When asked whether the decision to shut down Spain's airspace would worsen relations with the United States, Economy Minister Carlos Cuerpo replied in an interview to radio Cadena Ser that "this decision is part of the?decision already?made by?the Spanish?government to not participate or contribute to a unilaterally initiated war and against international law." Spanish Prime Minister Pedro Sanchez has been one of those who have spoken out most against the U.S.-Israeli attacks in Iran. He called them "reckless and illegal". Donald Trump threatened to cut off?trade with Madrid if it was denied?the U.S.'s use of?Spanish bases in the war.
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The war in Iran forces Asian economies to deal with a sagging currency and a surge in oil prices
The Asia-Pacific region is facing its toughest test yet since the COVID-19 Pandemic. There are few options available to policymakers as they try to protect their economies from an energy shock which is hitting them harder and earlier than anywhere else. Asia purchases about 80% of oil shipped through the Strait of Hormuz. According to commodity analysts at J.P. Morgan, shortages are expected to worsen in April and May, meaning that authorities will have to act quickly. Diesel prices have tripled in Manila for 'drivers' of jeepneys, colourful minibuses with a lot more power. Vietnam is facing a jet-fuel shortage, and South Korea's leading cosmetics companies are looking for plastic resin in order to manufacture the pots which hold their skincare products. The U.S. and Israel war against Iran in Asia will likely lead to higher inflation and a slower growth rate, just as it has in other parts of the world. Asian currencies, some of which were already in trouble, have been heavily sold. This has made them the biggest losers worldwide. The Asian financial crisis is resurfacing and policymakers are faced with a difficult choice: raise rates, spend reserves or watch their currencies fall further. This month, the rupee of India, the rupiah of Indonesia, and the peso de Philippines have all reached record lows in relation to the dollar. The yen, too, has also hit a new low. "The main problem is that Asian currencies were too strong before," said Alicia Garcia Herrero Asia-Pacific Chief?economist of Natixis, Hong Kong. She said, "The central bankers... do not have any instrument." "The economy is going to crash and they can't cut any more, not just because of inflationary pressure but also because they have already cut so many times." The dollar has been one of the few safe havens for the past month, and it's reached historic highs. It is up more than 4% versus the won, the peso, and the Thai baht, compared to a gain of only 1.5% against the euro. No Easy Options The problem is that there is no easy solution, not least because the options other than importing more oil do not actually solve the squeeze. This is already affecting prices of plastics and fertilizers. In response to higher rates, you risk slowing down an economy at a time when it is most in need of support. Subsidizing fuel is expensive, and bond investors may not like such a move in countries or emerging markets with budget pressures. Direct currency interventions can be risky and costly in volatile foreign exchange markets. Sonal Varma is Nomura's Asia Outside Japan chief economist. Varma stated that "whether it is the role of currency (or) monetary policy, fiscal policy," Varma. There will be macro variables which will have an impact. "Each country must decide what the best trade-off is for their own local situation." Australia has increased interest rates so far since the war started in late February. Authorities in other parts of Asia-Pacific rely on currency intervention, guidance and unconventional tools to help cushion rising petrol prices and stabilize financial markets. Last week, it was reported that South Korea has turned to its huge national pension fund to increase its hedging and protect the won. India and Indonesia are defending their currencies, and changing the way their markets work. India has capped banks' currency positions while Indonesia opened a repo marketplace for short-term dollar. Japan has renewed its intervention threats. The yen is not far from a four-decade low. Meanwhile, the Philippines declared a state emergency and let their currency fall to a new record low. They also held a surprise policy meeting last week, warning that they were ready to act. Fred Neumann is the chief Asia economist for HSBC Hong Kong. "I believe there is a growing recognition in Asia that you cannot really change the fundamental course of exchange rates. You can only lean against the wind. Most of Asia has healthy foreign exchange reserves. There are no parallels to the dollar debts and pegged currencies that drove capital out nearly 30 years ago. According to the most recent data available, India had approximately $698 billion of reserves on March 20. This would cover more than 11 months of imports. Indonesia and the Philippines have each more than six months worth of foreign currency import cover. Analysts say that central bankers must be creative to counter the strong dollar demand due to the haven effect. Neumann, from HSBC, said that policymakers need to be more agile. "Having unscheduled meeting and having frequent communication with market is likely helpful." In an environment such as this, you don't want be dogmatic. You must be very clear. "You need to be clear in your assessment."
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South Korea is considering nationwide driving restrictions as oil prices rise
Senior officials have said that South Korea may extend driving restrictions to the public if oil prices continue to rise. The authorities are trying to curb energy demand due to supply constraints caused by the U.S./Israeli war with Iran. Koo 'Yun-cheol'said that the government may expand restrictions on the use of passenger cars beyond public institutions if oil prices increase to $120-$130 a barrel, from the current range of $100-$110. The policy, if it were to be extended to all citizens, would mark the first national driving restrictions since 1991, when the government implemented a 10-day rotation system for vehicles to save energy. Koo, speaking on a local radio station, said that if the Middle East situation worsened, the crisis alert level would be raised to the "warning" stage. At this point, we would need to reduce consumption. This is the third-highest alert level of the four-stage system for resource security in Malaysia. He said the government may also consider further fuel tax reductions to ease the burden of households. In a separate press release issued on Monday, the finance ministry stated that a decision regarding mandatory driving restrictions for the private sector was still pending. The authorities will weigh up energy supply conditions as well as broader economic factors prior to taking any action. South Korea imports 70% of its crude oil from the Middle East. This leaves the country vulnerable to disruptions in supply and price fluctuations resulting from tensions. Last week, the government enforced a five-day mandatory vehicle rotation system in the public sector. This restricted vehicle use according to licence plate numbers. Energy Minister Kim Sung Whan stated last Thursday that authorities would review tighter demand management measures if the alert level rose further. This included a wider enforcement of driving restrictions, and encouraging voluntary participation from companies and financial sectors. Conglomerates like Samsung Electronics, SK Group and others have joined this?effort and urged their employees to reduce the use of private cars and adopt 'fuel-saving measures. Senior politicians and lawmakers have also posted on social media about the use of public transport and bicycles as an example, and called on the public to join in energy-saving efforts.
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Capital A names a new deputy CEO and explores dual listing in Hong Kong
Capital A Berhad, a Malaysian company, named a senior 'banker' as its deputy CEO on Monday. The group is looking to'scale up their?core business after separating its aviation division to its affiliate AirAsia X. Tony Fernandes, the founder and CEO of Capital A, said that Effendy, a former chief executive officer at Malaysia's CIMB Group who was previously in charge of consumer and digital banks, would help to spearhead Capital A's growth. This will include exploring a plan for listing?the company in Hong Kong before mid-year. He told a media conference that "we've appointed banks and this could possibly happen in July or?August?this year." Capital A sold its'short-haul' aviation business in January to AirAsia X. This allowed the airline to refocus on growing operations and reducing costs, while Capital A focused on growing its businesses, including logistics, branding and aircraft maintenance. Both companies have suffered from the economic impact of the war in Iran. Capital A shares have fallen 27% in the last?month, while AirAsia X has plummeted 41%. Fernandes stated that the company also plans to list its brand unit, "AirAsia Next", in the U.S. before the end of the year. This is a plan that was cancelled two years ago. He said that the listing plans for Capital A and AirAsia Next depended on the group's exit from the PN17 classification. This is a label given by Malaysian stock exchanges to financially distressed firms. Capital A 'has been classified PN17'since 2022 after it suffered large losses - during the coronavirus epidemic.
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Fuel price spikes threaten travel demand, causing airlines to face a dilemma regarding fares
The sudden rise in oil prices has forced global airlines to increase fares and reduce capacity. However, the industry's ability remain profitable depends on whether consumers decide to cut back on their flying because gasoline costs are threatening household budgets. The airline industry forecast'record profits' of $41 billion by 2026 before the U.S. - Israel conflict with Iran started last month. However, a doubling of jet?fuel costs has put that in doubt and forced carriers to rethink networks and strategies. United Airlines, Air New Zealand, and Scandinavian SAS all announced fare increases and capacity reductions. Others imposed fuel surcharges. Rigas Doganis said that airlines face an existential threat. He was the former head of Greece's Olympic Airways, and a director at Britain's easyJet. They will have to reduce fares in order to stimulate a weakening market, while the higher cost of fuel will force them to raise fares. "A perfect storm", said Doganis who is now the chairman of London-based consultancy Airline Management Group. Record Passenger Traffic The?industry last year reported record global passenger traffic, which rebounded about 9% over pre-pandemic numbers despite persistent supply-chain issues that affected the deliveries of new aircraft. The record post-pandemic travel demand and persistent supply chain challenges had constrained capacity and given airlines considerable pricing power, as they filled more plane seats. The scale of the increase needed to compensate for the surge in jet fuel prices is enormous at a time when the consumer's discretionary spending could be curtailed by higher gasoline costs. Andrew Lobbenberg, Barclays head of European Transport Equity Research, said that the only way to increase prices is to reduce capacity. "I would expect that to happen this time and in previous crises, people have just to start cutting capacity." HIGHER TICKET PRICES United Airlines CEO Scott Kirby said to ABC News that the airline would need to raise fares by 20% to cover higher fuel costs. Cathay Pacific Airways in Hong Kong has reduced fuel surcharges on two occasions over the past month. A return flight from Sydney to London from Wednesday will incur a fuel surcharge of $800. Prior to the Iran conflict, the normal round-trip economy class fare for the route was approximately A$2,000 (1,369.60). Analysts say that low-cost carriers may struggle most because their customers are more price sensitive than corporate clients and wealthy consumers, who are increasingly being targeted by premium competitors like Delta Air Lines or United Airlines. Nathan Gee, Bank of America’s Asia-Pacific Transport Research Head, said: "I believe that for more price-sensitive travelers, even short-haul flights are downgraded to rail, bus, or other alternatives." OIL SHOCKS The Middle East conflict has been the fourth oil crisis for the airline industry, but the first time that carriers such as Vietnam Airlines are concerned about the physical supply of fuel because of the closure of the Strait of Hormuz. One was in 2007-2008, before the global economic crisis slowed demand. Another followed the Arab Spring in 2011, and the third came after the Russia-Ukraine War in 2022. Between 2008 and 2014, a series of mergers like Delta-Northwest or American Airlines-US Airways reduced the number of major U.S. carriers to four. Low-cost carriers like IndiGo and Ryanair relied on single-aircraft aircraft fleets and quick turnarounds to maintain low unit costs. It is obvious that carriers can reduce costs by replacing older, more fuel-inefficient planes with newer, more fuel-efficient ones. However, a severe shortage of supply chain in the aftermath of the pandemic, and problems with the latest engines has delayed deliveries. While U.S. low-cost carriers are equipped with some of the most modern and fuel-efficient aircraft in the industry, the cost of these planes could be a barrier to profitability if demand for travel falls. Dan Taylor, the head of consulting at aviation advisory firm IBA said that the current oil crisis was expected to "widen the gap" between financially strong airlines and those with weaker finances. He said that carriers with strong balance sheets, pricing power and reliable access capital were better positioned to withstand ongoing pressures. "Airlines with low profitability or limited funding options could face increased financial pressure."
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New York Times Business News - March 30,
These are the top stories from the business pages of the New York Times. These'stories' have not been verified and we cannot vouch for the accuracy of these stories. In an effort to ease the de facto blockade Washington imposed on Cuba, the United States has allowed a Russian oil tanker to arrive in Cuba. Jonathan Greenberger is the next global editor-in-chief of Politico. Tom Homan, Trump's top border official, said that Immigration and Customs Enforcement (ICE) agents may remain at U.S. Airports even after they are paid again. This is because the shutdown of Homeland Security has caused a shortage of security personnel. (Compiled by Bengaluru newsroom) - A few hundred U.S. Special Operations forces are now in the Middle East. They join thousands of Marines and Army paratroopers on a deployment that is meant to give President Trump more options for expanding the war against Iran, which has been ongoing for a month. (Compiled by Bengaluru Newsroom)
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Maguire: Key tools for tracking the latest energy sector disruptions caused by the Iran war
Energy traders and investors who had hoped for a quick resolution to the U.S. and Israeli war against Iran were disappointed. As the conflict enters its second month, they must prepare for more potential disruptions in energy flows as well as market fluctuations. Energy market trackers need to look beyond the latest "social" media missives and use professional analytical tools which provide real-time insight into the key energy and shipping industries around the world. Here is a list of key resources and tools that energy analysts and traders are using to manage risks and seize opportunities arising from the aftermath of the conflict. Map Tracking Analysts who want to keep up with the latest developments in the Middle East can use mapping software to show the locations of vessels and key energy infrastructure that has been affected by the conflict. Market data tools like LSEG Workspace give traders a current view of the global fleet of energy vessels, including the vessel clusters within and around Strait of Hormuz. News feeds and other information services are also used to update the mapping software with the most recent status of the energy and port infrastructure in the region. Here you can find the latest information on the Iran conflict. MARKET MOMENTUM LSEG, and other data platforms, provide traders and analysts with the latest vessel?charter rate data, in addition to maps that track the location of energy ships. There are also data on the refining margins in major consumer markets. These show how much profit or loss refiners can make with specific grades of crude oils. Export volumes for different energy products, such as crude oil, condensate, gasoline, diesel and jet fuel, can also be measured to gauge where the loadings are growing or contracting. LSEG's news service, which is staffed by reporters who cover energy markets around the globe, publishes analysis and news about the Iran conflict on all major economies. Market trackers can also benefit from data on U.S. gas prices, information about changes in refinery purchases in Asia and analyses of the efforts to reroute energy cargos. WIDER LENS Analysts can learn how Iran uses cheap drones to counterbalance effects of more expensive military equipment that is used by the U.S. or Israel. This provides hints as to how Iran has been able to sustain its war effort for so long. The information on the flight paths of refuelling planes into and out of Tel Aviv, which are used to keep fighter jets and bombers in action above Iran, also helps to inform the U.S. forces and Israeli forces on what they need to do to maintain pressure on Iran. The potential for the Middle East to be affected by the war is also revealed through a deep?dive into the extent of the Iran War. This array of tools, news, and analysis is essential for energy analysts and investors to navigate the "evolving risks" arising from the ongoing Iran War as it extends into its fifth week. The author is a columnist and he has expressed his opinions here. You like this column? Open Interest (ROI) is your new essential source of global financial commentary. Follow ROI on LinkedIn, X and X. Listen to the Morning Bid podcast daily on Apple, Spotify or the app. Subscribe to the Morning Bid podcast and hear journalists discussing the latest news in finance and markets 7 days a weeks.
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Swiss stocks: Factors to be on the lookout for March 30
Here are some of the key factors that could affect Swiss stocks on Monday: U.S. ?TARIFFS Following a preliminary agreement on tariffs reached last year, the Swiss President Guy Parmelin stated that trade?talks? between Switzerland and the United States would continue past March. According to an internal memo viewed by. NESTLE Nestle, the Swiss food giant, said that thieves stole 12 tons of KitKat bars from Europe last week. ANALYSTS' ?VIEWS * JP Morgan increases?target?price from CHF155 to CHF160 * SKAN GROUP / AG - Berenberg reduces?target price from CHF 67 to CHF 60 ECONOMY Swiss KOF indicator due at 0700 GMT SNB sight deposit due at 8am GMT (Reporting from Zurich and Gdansk Newsrooms)
Air China resumes North Korea flights but no longer accepts new bookings
According to Chinese state-run media and tour operators, 'China's Flag carrier' resumed flights on Monday between Beijing, the capital, and Pyongyang, the North Korean capital. However, it has stopped taking new bookings for the route.
Chinese state media reported that Air China resumed weekly flights in North Korea for the first since the COVID-19 outbreak. The information was based on the tour operator Young Pioneer Tours.
Rowan Beard, from Young Pioneer Tours, said that Air China had stopped accepting new bookings and future flights were not confirmed. He cited his company's communication with Air China.
The airline did not respond immediately to a comment request.
After the return of passenger trains between the two capitals, the flights between Beijing and Pyongyang were reinstated.
North Korea remains largely closed for foreign tourism with a few exceptions. For example, some Russian tour groups are allowed to visit under certain restrictions.
Beard said that with tourism non-existent at the moment, it would be much harder to fill these planes with a weekly service.
Yonhap News Agency in South Korea reported that only 10 passengers were on the flight from Beijing to Pyongyang.
Beard stated that high fuel costs could be another reason for Air China's decision to stop flights into North Korea.
Air China's site did not show any future flights between Beijing Pyongyang. Reporting by Liz Lee and Ju-min Park; Editing by Christopher Cushing, Jamie Freed and Shanghai Newsroom
(source: Reuters)