Weekly Market Update - 30 May 2022

Grain and Fertilizer Exports on The Table

Russian President Vladimir Putin said he’s willing to facilitate grain and fertilizer exports as global concern mounts about food shortages and rising prices — but only if sanctions on his country are lifted.

Putin told Italian Prime Minister Mario Draghi Moscow is “willing to make a significant contribution to overcoming the food crisis” on the condition that the “politically-motivated restrictions” are lifted.

The U.S. and its allies would be highly unlikely to agree to remove the extensive sanctions placed on Russia for its actions in Ukraine. Putin’s comments come days after European leaders slammed the Russian leader for weaponizing food.

All eyes will now be on whether Russia can sidestep its first foreign default in a century, with $100 million in interest on debt due to reach investors by Friday.

FED Minutes

The Federal Reserve has revised up the forecast for its preferred inflation gauge -- the personal consumption expenditure index -- to 4.3% for this year before decelerating to 2.5% next year.

Members of the policy committee aren't unduly worried about economic growth and expect it to “advance at a solid pace over the remainder of the year.” Since the Fed's meeting earlier this month, economic data has taken a step backward, with Fed Atlanta President Raphael Bostic suggesting it may make sense to pause on rates in September.

Musk & Twitter

Twitter Inc. shares rose in pre-market trading after Elon Musk dropped plans to partially fund his purchase of the social network with a margin loan tied to his Tesla Inc. stake and increased the size of the deal’s equity component to $33.5 billion.

The new structure could reduce the risk of the deal for both Musk and his lenders, particularly given the recent slide in Tesla’s stock price. The electric carmaker has sunk about 40% since Musk first announced his stake in Twitter in early April.