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INDIA RUPEE: Rupee little changed at the end of week, but looming deadline for tariffs in focus
The Indian rupee ended the week with little change as traders awaited the outcome of the U.S. India trade talks. A positive result could help the local currency overcome a stubborn resistance level. The rupee ended the day at 85.3225, down by about 0.1% on both a weekly and daily basis. The currency had risen to a one-month peak of 85.25 in the previous session but pared gains on Friday after traders scaled back wagers on rate cuts by the Federal Reserve following a stronger-than-expected U.S. labour market report. A trader from a foreign bank stated that the rupee was impacted by the dollar demand of importers. Market participants avoided aggressive bullish bets on the local currency in order to reduce the risk carried over the weekend. The rupee has been unable to hold above the technical resistance around 85.35-85.40 in recent sessions. However, a favorable trade agreement with the U.S. could help the currency overcome this hurdle. Donald Trump, the U.S. president, has announced that Washington will begin sending letters to other countries specifying what tariffs they will be facing on their imports into the United States on Friday. In a note referring to these letters, MUFG stated that "if Trump's remarks prove to be accurate, investors will begin to downgrade their growth expectations and increase their inflation expectations. This will only encourage more dollar selling." Trump announced an agreement with Vietnam earlier this week and the White House hinted at a future deal with India. Talks with Japan, the U.S. closest ally in Asia, have also appeared to be hitting a snag. Analysts have noted that despite the uncertainty, India's rising foreign exchange reserves as well as the central bank's declining forward book is helping to strengthen the rupee.
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Russia strikes Kyiv hours after Trump and Putin's call with the largest drone attack
Officials said that Russia pounded Kyiv in the biggest drone attack of the conflict, causing at least 23 injuries and damaging buildings throughout the capital just hours after Donald Trump had spoken with Vladimir Putin. Air raid sirens reverberated throughout the night, as did the whine and boom of detonations. According to Ukraine's Air Force, Russia had launched 539 drones with 11 missiles. Residents and their families sought shelter in the underground metro stations. The city centre was engulfed in a thick, acrid smoke. The attack was described as "deliberately cynical" by President Volodymyr Zelenskiy who will speak with Trump on Friday evening about the war, and the U.S. decision to halt some air defence missile deliveries. Zelenskiy, on X, said: "Notably the first air-raid alerts were sounded in our cities yesterday almost simultaneously with news reports about a telephone call between Trump and Putin." He added that "Russia is once again showing its inability to end the war and terror", and called for more pressure and air defence equipment on Russia. Officials in Kyiv said that the attack caused damage to about 40 apartment buildings, passenger rail infrastructure, five kindergartens, cafes, and many cars, spread across six of Kyiv’s 10 districts. Poland confirmed that the consular section at its embassy in central Kyiv was damaged, but added that no staff members were injured. Mayor Vitali Klitschko stated on Telegram that 14 of the injured had been hospitalised. Ukrzaliznytsia (Ukraine's state-owned railway), the largest carrier in the country, announced on Telegram the attacks on Kyiv had forced it to divert several passenger trains, which caused delays. Klitschko reported that damage was seen on both sides the Dnipro River, which bisects the city. Falling drone debris also set a medical center on fire in Holosiivskyi District. In recent weeks, Russian air attacks on Kyiv intensified and included some the deadliest attacks of the war against the city of 3 million people. CALL FOR SANCTIONS Trump claimed that his call with Russian President Vladimir Putin resulted in little progress on the efforts to end war. The Kremlin, however, reiterated its commitment to solving the "root causes" of the conflict. Kyiv warned that Washington's decision to stop some critical weapons shipments to Ukraine earlier this week would weaken the country's ability to defend itself against airstrikes intensifying and battlefield advances. Zelenskiy demanded on Friday that Moscow change its "dumb and destructive behavior". He said that "for every such attack against human life and people, they must feel appropriate sanction and other blows" to their economy, revenues and infrastructure. SHELTERED Ukraine's Air Force stated that it destroyed 478 air weapons launched by Russia overnight. It added that air strikes had been recorded at eight different locations in the country, with nine missiles as well as 63 drones. Videos on social media showed people fleeing for shelter, firefighters fighting fires in the darkness and destroyed buildings with blown-out windows and facades. Both sides deny that civilians were targeted in the war which Russia started with its full-scale invasion in Ukraine in February 2022. The conflict has claimed the lives of thousands of civilians, mostly Ukrainians. Although neither side has released military casualty numbers, it is believed that many more soldiers have perished on the frontlines. Five people were killed by Russian shelling late on Thursday in the city of Pokrovsk and its vicinity, Ukraine reported. Pokrovsk has been a target for Russian attacks since months. Reporting by Olena Hartmash, Pavel Polityuk and Valentyn Ogirenko; Writing by Ronald Popeski and Lidia Kelly; Editing and proofreading by Stephen Coates; Raju Gopalakrishnan and Alexandra Hudson
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Air India Express was warned by regulators about the delay in fixing an Airbus engine and falsifying records.
A government memo revealed that India's aviation regulator reprimanded Air India in March after the budget airline failed to change engine parts on an Airbus A320 within the time frame specified by European Union's Aviation Safety Agency, and for falsifying records as proof of compliance. Air India Express issued a statement in which it admitted the mistake to the Indian watchdog, and took "corrective action and preventive actions". Air India is under scrutiny after the Boeing Dreamliner crash that occurred in June, which claimed the lives of all but one person on board. Investigations are still ongoing into the world's biggest aviation disaster since a decade. Air India Express reported the engine problem on March 18 - months before the crash. The regulator also warned Air India's parent company this year for violating rules by flying three Airbus aircraft with unchecked escape slides and in June for "serious violations of pilot duty times". Air India Express is the subsidiary of Air India which is owned and operated by the Tata Group. The airline has over 115 aircraft, and 500 flights per day to 50 different destinations. In 2023, the European Union Aviation Safety Agency issued an airworthiness Directive to address a “potentially unsafe condition” on CFM International LEAP-1A engine, asking for the replacement of certain components, such as seals and rotating pieces, stating that some manufacturing defects had been discovered. In its directive, the agency stated that "if this condition is not corrected, it could result in failure of the affected parts and possibly high-energy debris release with subsequent damage to, or reduced control of, an aeroplane." According to a confidential memo sent by the Indian government in March to the airline and seen by., the Directorate General of Civil Aviation's (DGCA) surveillance revealed that the parts modification on an Airbus A320 engine "wasn't complied with" within the "prescribed time limit". The memo stated that "in order to show the work was carried out within prescribed limits, it appears the AMOS records were altered/forged", referring to software called Aircraft Maintenance and Engineering Operating System, which is used by airlines for managing maintenance and airworthiness. Memo added that the "mandatory modification" was needed on Air India Express VT-ATD aircraft. According to AirNav Radar, this plane flies domestic routes as well as some international destinations like Dubai and Muscat. It added that the lapse "indicates a manager accountable for quality control has failed to ensure it." Air India Express' technical team told them that they missed the planned implementation date of parts replacement because records were being migrated on their monitoring software. The problem was quickly fixed. The memo did not mention dates or address the DGCA's concern about altered records, but it said that "necessary" administrative measures were taken after the March memo. These included removing the Quality Manager from his position and suspending Deputy Continued Airworthiness Manager. The DGCA, the European Safety Agency and other agencies did not answer any questions. Airbus and CFM International (a joint venture between General Electric, Safran and Safran) did not reply either. A source with first-hand knowledge of the incident said that the lapse was flagged by the DGCA during an audit conducted in October 2024. The plane had only made a few flights after the CFM parts were supposed to be replaced. "Such problems should be resolved immediately. This is a grave error. Vibhuti, a former legal specialist at India's Aircraft Accident Investigation Bureau, said that the risk is increased when flying near or over restricted airspace. In February, the Indian government informed parliament that 23 safety violations were reported by airlines and they were either fined or warned. Air India Express and Air India were involved in three of the cases.
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Chinese captain in Baltic Sea cable damage case appears before Hong Kong court
A Hong Kong court assigned an attorney to the captain of a Hong Kong registered ship accused of damaging undersea cable in the Baltic Sea. The case was adjourned to September so that the prosecution could gather more evidence. Wan Wenguo was the captain of NewNew Polar Bear container ship when he appeared before the Eastern magistrates court in Hong Kong without legal representation. The court assigned him a duty attorney. According to a Hong Kong charging document, the 43-year old Chinese national was accused of causing "criminal damages" on an underwater natural-gas pipeline and submarine telecom cable between Finland and Estonia in October 2023. The document stated that the defendant had "without legal excuse damaged property belonging to someone else" and was "careless about whether such property would get damaged". The magistrate adjourned this case for three more months, until September 26. This was after the prosecution stated that it needed time to collect documents and other evidence with the Finnish and Estonian authorities. Wan is also facing two additional charges for alleged violation of shipping regulations, including the International Convention for the Safety of Life at Sea. Wan was not granted bail during his first hearing after his arrest in May. He was then remanded into custody. Wan chose to not apply for bail again on Friday, and was placed in detention. Since Russia's invasion of Ukraine in early 2022, the Baltic Sea region is on high alert against sabotage. This follows a series of failures of power cables and gas pipelines as well as telecoms. Some European governments accuse Russia of hybrid attacks, sabotage and the sabotage critical infrastructure. Moscow denies such accusations, claiming that the West seeks to undermine Russian interests by waging an information warfare. The Finnish authorities claim that the NewNew Polar Bear cut the Balticconnector subsea pipeline which connects Finland and Estonia below the Baltic Sea by dragging the anchor along the seabed. The Estonian Police suspects that the ship damaged the telecoms cables linking Estonia with Finland and Sweden between October 8-9, before striking the gas pipeline as it was heading to a Russian port near Saint Petersburg. The Finnish and Estonian authorities have yet to reach a conclusion on whether the damage is accidental or deliberate. (Reporting from James Pomfret, Hong Kong; Additional Reporting by Anne Kauranen, Helsinki; Editing done by Kate Mayberry).
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Tariff negotiations: Indonesia offers to purchase U.S. wheat and aircraft
In tariff negotiations with the United States its chief economist said that Indonesia would offer to increase purchases of aircraft for state carrier Garuda Indonesia, and wheat for instant noodle giant Indofood. Airlangga hartarto, the Southeast Asian nation’s chief negotiator and also its economics minister, told reporters that the government had also offered to reduce tariffs on American products such as agriculture, which pay between 0%-5% in tariffs. Jakarta faces a tariff of 32% on US markets. It had previously stated that it would sign A $34 billion deal Indonesian partners will be meeting with U.S. counterparts next week to discuss a number of issues, including the commitment to purchase more U.S. products and investment by Indonesian firms in the United States. Airlangga stated that the main U.S. exports would be subject to a near-zero tariff. However, it depends on how high our U.S. tariffs are. Garuda CEO said that it was in talks with U.S. Boeing about buying up to 75 aircraft. Garuda or Indofood did not respond immediately to comments. According to the U.S. trade representative, by 2024, the U.S. goods deficit with Indonesia will be $17.9 Billion. Indonesian data revealed that U.S. exports include aircraft, soybeans and petroleum gases. Airlangga replied that military deals are not part of the negotiations when asked if they include trade deals. Susiwijono Megiarso is a senior official at the Coordinating Ministry for Economic Affairs in Indonesia. He said that Jakarta had asked for preferential tariffs from the United States on its main exports including textiles, footwear, and electronics. He added, "We want the tariffs to be as low as they can." Indonesia also offers the United States investment opportunities in Critical Minerals Projects Its abundant resources include copper, nickel, and bauxite. Reporting by Stefanno Sulaiman, Ananda Teresia and Clarence Fernandez; editing by David Stanway and Clarence Fernandez
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IRNA reports that the first international airline to land at Tehran Airport since flight suspension is IRNA.
FlyDubai was the first international airline to land at Tehran’s Imam Khomeini Airport, after a 20-day flight suspension that was imposed because of Israeli attacks against Iran. The official IRNA news service reported this. IRNA reported that the arrival of Flight FZ1930 from the airline base in United Arab Emirates at Iran's largest airport marked the beginning of the gradual return of normal operations to Iranian airspace. FlyDubai, a low-cost airline and sister carrier to Emirates. Local authorities described this landing as an indication of the aviation sector's effective crisis management and restored stability. IRNA reported that passenger services were conducted under strict safety and security protocols. After Israeli airstrikes, and increased security concerns in the skies of Iran, international and domestic air traffic was halted. State media reported that Iran's airports are now open to domestic and international flights except in Isfahan, Tabriz and Isfahan. The airspace of the country is also available for international transit flights. (Reporting and editing by Christopher Cushing; Dubai newsroom)
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Platts removes three floating storage units in its Asia fuel oil assessment
S&P Global Platts, a commodities pricing agency, has informed its subscribers that it will no longer include three floating storage units in its assessment of Singapore fuel oil and bunker fuel ex-wharf cargoes. Platts stated in a July 3 note that the vessels CS Innovation and CS Brilliance would no longer be reflected in its process of market-on-close assessments as additional loading points. The vessels are operated as floating storage units by CSZ Shipping CSHA Shipping and CSHB Shipping at Tanjung Pelepas within the Tanjung Pelepas Port Limits, in southern Malaysia’s Johor State. Platts stated that the exclusion was a result of a review on market participants' abilities to make offers during the assessment process when product is being loaded from these vessels. The number of floating storage units has been reduced to 11 from 14. (Reporting and editing by Christopher Cushing; Jeslyn Lerh)
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Heatwave and low water levels on the Danube disrupt shipping
The Danube River in Hungary is experiencing unusually low water levels, affecting the shipping industry, agriculture and local ecosystems. This river is Europe's second longest river and a major transport route. Budapest's temperatures reached 35 degrees Celsius this week, as Europe blasted in a heatwave that has been linked to at least eight deaths in the region. Warsaw's Vistula River was at a record-low, while the Rhine river in Germany was unusually low. Attila Benedick, vice president of the Hungarian Shipping Association said that due to the low water level, cargo ships are forced to leave more than half their cargo behind and can only work at 30-40% of capacity. He said that shipping rates could increase up to 100% if a ship is not able to sail at full capacity. Attila zegi, deputy spokesperson for the Hungarian Directorate of Water Management said that such low water levels are not uncommon, but usually occur in August. Szegi stated that rain is expected to fall in the Danube catchment region next week. This should result in a slight increase in water levels, and a better shipping situation. HungaroMet, the Hungarian meteorological state institute, said that the rainfall in June this year was 17% less than the average. This makes it the driest month since 1901. Gyorgy Mattavovszki, who was paddling his kayak in a town called Szob north of Budapest, said that June is usually one of the wettest months of the year. It is beautiful because it is so clear and easy to paddle on ...,, but it's also worrying. (Reporting and writing by Krisztina Feyno, editing by Alex Richardson).
New EU sanctions against Russia to target the energy sector and banks
According to European Commission President Ursula von der Leyen, the 18th package against Russia has been proposed. It targets its energy revenues, banks, and military industry.
The new package proposes to ban transactions with Russia's Nord Stream Gas Pipelines as well as banks who engage in sanctions-circumvention.
Von der Leyen said at a press conference that "Russia will only understand the language of strength" if it imposes the rule by force.
In an effort to reduce Russia's revenues from energy, the Commission also proposed that the price cap for Russian crude oil be lowered to $45 per barrel. It was previously $60.
Von der Leyen stated that the cap on oil prices will be discussed during a G7 summit this week.
"My assumption would be that we do this together as the G7. She said, "We started this as G7. It was a successful measure from G7. I want to keep it as G7."
The proposal also lists additional vessels that are part of Russia's shadow oil fleet and trading companies.
Kaja Kallas, EU's chief diplomat, said that the next round of EU sanctions will target Russia’s energy revenue including its shadow fleet and military industry as well as its banking sector.
The EU will begin debating this proposal next week. Reporting by Julia Payne, Milan Strahm and Benoit van Overstraeten; Editing by GV de Clercq & Benoit van Overstraeten
(source: Reuters)