OPEC's Bullish 2027 Oil Demand Forecast Faces Scrutiny

Source: Bloomberg

Canadian Prime Minister Mark Carney arrived in Beijing on Wednesday, marking the first state visit by a Canadian leader in eight years and signaling a major effort to renegotiate economic ties. The trip centers on critical trade issues, with Chinese state media urging Ottawa to remove tariffs on the country's exports.

High-level meetings are scheduled with Premier Li Qiang on Thursday and President Xi Jinping on Friday. Discussions are expected to cover trade, energy, and global security.

The Core Negotiation: EVs for Canola

At the heart of the visit is a potential trade-off: Beijing has reportedly proposed easing restrictions on Canadian rapeseed products if Ottawa scraps tariffs on Chinese-made electric vehicles.

This dynamic stems from actions taken in 2024 under former leader Justin Trudeau, when Canada imposed tariffs on Chinese EVs, aluminum, and steel, largely to align its trade policy with the United States. China responded with its own levies on Canadian agricultural goods, including rapeseed, a major crop known in Canada as canola.

An opinion piece in the state-backed Global Times this week called for Canada to "translate a correct understanding of China into concrete actions, including lifting unreasonable tariff restrictions and advancing more pragmatic cooperation."

Mending Fences After Years of Tension

Since coming to power last March, Carney has focused on repairing a relationship that was frozen following the 2018 arrest of Huawei executive Meng Wanzhou in Canada. A meeting between Carney and Xi at the Asia-Pacific Economic Cooperation summit in South Korea last October was described by the Canadian leader as "a turning point in the relationship."

The push for better relations with China comes as Canada seeks to diversify its trade partners. Facing tariffs from the administration of U.S. President Donald Trump, Carney has set a goal to double Canada's non-US exports within the next decade. China currently stands as Canada's second-largest trading partner after the United States.

Persistent Friction Over Taiwan

Despite the potential for economic cooperation, significant political friction remains. Taiwan President Lai Ching-te recently thanked Canada for expressing concern over China's military drills last month, highlighting deepening ties between Taipei and Ottawa during a meeting with Canadian lawmakers on Tuesday.

Melissa Lantsman, deputy leader of Canada's Conservatives, assured Lai that Taiwan is a trusted partner with friends in the Canadian Parliament. In a sign of the diplomatic sensitivity, two Liberal Members of Parliament cut short their own visit to Taiwan on government advice to avoid any confusion with Carney's official trip to Beijing.

Global Tariff Landscape Shifts

While Canadian officials have downplayed the likelihood of an immediate deal on EV tariffs, momentum may be building internationally. On Monday, the European Union announced it is considering a minimum price system to replace the import tariffs of up to 35% it imposed on Chinese EVs in 2024. The EU's reassessment comes as it seeks to strengthen other trade relationships amid rising tensions with the U.S. following President Trump's threats over Greenland.

Poland is carefully monitoring potential market turmoil stemming from a US investigation into the Federal Reserve as it weighs issuing dollar-denominated debt later this year. The Eastern European nation, which carries a public debt load larger than that of Malaysia, Turkey, and Argentina, has significant exposure to the US currency, having sold two dollar bonds last year and maintaining at least 11 such notes outstanding.

Karol Czarnecki, head of the Polish finance ministry's public debt department, confirmed the government's cautious stance. "We are taking a deep look," he said in an interview. "We cannot exclude that the development of the situation will be adverse for issuers, but for the moment we're not discounting a disaster."

Scrutiny on Fed Independence Sparks Concern

The market uncertainty follows a probe by the Trump administration into the remodeling of the US central bank's headquarters. This move is widely seen as a significant escalation in attacks on the Federal Reserve, raising fresh concerns about the institution's political independence.

For sovereign issuers like Poland, any instability in US markets or perceptions of the Fed could directly impact the cost and viability of issuing dollar-denominated bonds.

Poland's Broader Foreign Debt Strategy

The potential dollar issuance is part of a broader strategy to front-load its 2026 borrowing plans, which could total as much as €12 billion ($14 billion) in foreign-currency debt sales this year. Czarnecki noted that Poland's options extend beyond the dollar to include the Japanese yen. He also highlighted the Swiss franc as an "interesting proposition" due to favorable pricing and demand dynamics.

Poland has already been active in the market, selling a total of €3.25 billion in 5- and 10-year euro-denominated notes last week. However, Czarnecki suggested another euro transaction is unlikely until after the summer to allow the market time to absorb the recent supply.

Maintaining Flexibility in Volatile Markets

While Poland last sold bonds in Japanese yen in 2024 and has not tapped the public Swiss franc market since 2015, any future transactions in dollars or yen will hinge on market conditions. The government is preparing for multiple scenarios to navigate the current uncertainty.

"We are pretty much ready for both markets," Czarnecki explained. "We have a kind of optionality in case something wrong happens, to choose the market we want to enter."

Source: reuters

Saudi Arabia's Public Investment Fund is transferring roughly $12 billion worth of gaming company shares, including firms such as Nintendo Co. and Bandai Namco Holdings Inc. to its subsidiary Savvy Games Group.

Savvy's status as a powerhouse in the industry will grow as the company still possesses billions of dollars earmarked for future investment in gaming businesses. Once the transferrals are complete, Savvy will own about 10% of firms such as Koei Tecmo Holdings Inc., NCSoft Corp., Nexon Co. and Square Enix Holdings Co., according to a company document reviewed by Bloomberg news.

Savvy was established in 2021 to help the country diversify its holdings away from oil. With $38 billion to invest, Savvy bought up Monopoly Go developer Scopely Inc., Pokemon Go developer Niantic, and several esports organizations. While Monopoly Go was a breakout success, Savvy's esports investments have been troubled and the company has let staffers go.

The PIF did not respond to a request for comment. Although the fund is the largest investor in Electronic Arts Inc.' $55 billion buyout, Savvy is not involved with the transaction, according to a person with knowledge of the buyout.

The government arm already transferred its 11 million shares of Take-Two Interactive Software Inc., according to a late December regulatory filing. Savvy will inherit the PIF's hands-off approach and has no plans to become active investors, according to the person.

The transfer has been planned for a long time, according to Amar Batkhuu, a Savvy spokesperson. "These transfers will move the stewardship of PIF's games investments to Savvy, given Savvy is a leading games organization for the PIF and a core component of the National Gaming and Esports Strategy," he said. There are no plans to change the investment strategy, he added.

Source: Bloomberg Europe

Austria’s coalition government has unveiled a new package of tax cuts and subsidies aimed at lowering costs for households and businesses. The move is a direct response to persistent inflation and the rising popularity of right-wing nationalist parties in recent polls.

What's in Austria's New Economic Package?

The government announced on Wednesday that the program will be rolled out over the next six months. The core measures are designed to provide immediate relief from high prices.

Key components of the plan include:

• VAT Reduction: Value-added taxes on staple foods will be cut in half.

• Consumer Energy Relief: Electricity prices for consumers are set to fall by approximately one-third.

• Industrial Power Cap: Industrial electricity users will have their prices capped at €50 ($58.23) per megawatt-hour, a policy that mirrors subsidies introduced by neighboring Germany in November.

"We want to not only slow down inflation in key areas, but also to ensure prices actually fall – for energy and for the most important staple foods," said Vice-Chancellor Andreas Babler, who supports active economic management.

This marks the second time in a month that the coalition—comprising the conservative People's Party, the Social Democrats, and the liberal Neos—has intervened in the market. In December, it passed legislation requiring state-owned utilities to prioritize affordable electricity over maximizing profits for shareholders.

Tackling Inflation Above the Eurozone Average

Since taking office last year, the Austrian government has struggled with inflation rates that have consistently outpaced those in other European Union member states. This has been partly attributed to companies passing on the costs of faster wage increases to consumers.

According to Eurostat, Austria's annual inflation slowed to 3.9% in December. While an improvement, this figure is still nearly double the 2% average across the 21 EU countries that use the euro.

Political Pressure Mounts as Far-Right Gains Ground

The economic measures are also a strategic political move. The far-right Freedom Party has seen a surge in support by focusing its campaign on affordability and migration, and it currently holds a significant lead in polls.

With its mandate scheduled to run until late 2029, the current government is under pressure to address the economic concerns fueling its political rivals.

A Future-Forward Push: €2.6 Billion for High-Tech

Beyond immediate cost-cutting, the package also includes a significant investment in technology to attract high-tech industry. Chancellor Christian Stocker announced that the plan allocates €2.6 billion for strategic sectors, including:

• Artificial intelligence

• Quantum computing

• Photonics

Additionally, the government is expected to pass legislation that will permit autonomous-driving vehicles on Austrian roads, signaling a broader push toward future-focused economic development.