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FirstFT: Global energy crisis deepens as traders scramble for supplies

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The global energy crisis deepened Tuesday as a further rise in natural gas prices in Europe and the US threatened to push some of the world’s largest economies into recession.

Gas markets in Europe rose by a staggering 10 percent to as much as $251 per megawatt-hour, equivalent in energy terms to more than $400 a barrel of oil, as traders rushed to secure supplies for the winter. Prices have more than doubled from already extremely high levels in June, though they fell marginally later on Tuesday.

The measures followed Russia’s cut in supplies in retaliation for Western powers supporting Ukraine after the invasion of Moscow. Traders fear competition for sea shipments of liquefied natural gas with Asian utilities ahead of the winter heating season. European politicians have accused Moscow of arming supplies.

With gas prices more than 10 times their normal levels, the possibility of a deep recession has increased, with investors now more depressed about the German economy than at any time since the eurozone debt crisis a decade ago.

European gas prices are expected to remain near record levels or even climb higher as winter approaches, with Berlin discussing the possibility of rationing gas consumption and governments from London to Madrid preparing to subsidize punitive energy bills.

Thanks for reading FirstFT Asia. Here’s the rest of the day’s news – Amanda

1. Russia blames ‘sabotage’ on explosions in northern Crimea Moscow blamed “sabotage” for explosions in Crimea and claimed Ukraine was behind covert attacks on mainland Russia. The rare acknowledgment may provide evidence of Kiev’s increased ability to strike deep behind enemy lines. Ukraine has not claimed responsibility for the attack, but warned that Crimea would not be exempted from their efforts to repel Russian forces.

2. Walmart and Home Depot ease recession fears despite ongoing inflation Two of the largest retailers in the US reported resilient consumer spending, helping to ease fears of a recession amid rampant inflation. Walmart beat earnings expectations, forecasting a smaller decline in full-year earnings than it had previously warned. Home Depot reported its highest quarterly revenue and profit ever.

3. Odinga rejects Ruto victory in Kenyan presidential election Kenyan presidential candidate Raila Odinga is taking legal action to challenge William Ruto’s narrow election victory amid concerns over post-election violence. Odinga has until Monday to object. Despite some clashes in the national polling station, the streets have remained largely quiet.

4. Liz Cheney Braces For Primary Defeat After Leading Republican Indictment Against Trump Liz Cheney is likely to lose the Republican primary in Wyoming to a Trump-backed candidate. The daughter of former Vice President Dick Cheney served as vice chair of the congressional panel investigating the January 6 attack on the United States Capitol. The primary contest is one of the latest in the run-up to November’s midterm elections and serves as another test of Trump’s grip on Republican voters following the FBI’s search of his Mar-a-Lago estate.

5. Harvard offers free MBA tuition to lowest-income students Harvard Business School, one of the world’s most prestigious business education providers, waives a $76,000 annual fee for lower-income students. The announcement follows steps by other wealthy US universities to improve financial conditions as tuition costs rise and students suffer debt.

the next day

NATO holds crisis talks with Kosovo and Serbia NATO Secretary General Jens Stoltenberg will meet in Brussels today with Kosovo Prime Minister Albin Kurti and Serbian President Aleksandar Vučić amid growing speculation about war between the two countries. Kurti and Vučić will hold talks with the EU’s diplomatic arm tomorrow.

Corporate Profits A number of companies will report their earnings today as we near the end of the current reporting season. Notably, Cisco Systems, Target and Tencent will announce business figures today.

Economic data The UK will release July inflation data today. The country is currently grappling with a cost of living crisis as real wages fall at a record pace.

Indonesian Independence Indonesia celebrates Independence Day, it has been 77 years since the country launched its revolution against Dutch rule.

What else do we read

How a banker battling the Hong Kong ban broke a Wall Street record AMTD Group’s Calvin Choi is riding high after a rapid price hike within weeks of his company’s IPO in the US. The rise comes as Washington cracks down on Chinese companies listed in the US and Choi faces a two-year ban from Hong Kong’s financial watchdog.

AMTD Digital founder Calvin Choi rings a ceremonial bell on the floor of the New York Stock Exchange

AMTD Digital founder Calvin Choi, center, rings a ceremonial bell on the floor of the New York Stock Exchange during a previous IPO of a group company © Richard Drew/AP

EU digs for more lithium, cobalt and graphite in green energy push Europe wants to increase its supply of clean energy raw materials as it looks for ways to end dependence on Russian oil and gas. The European Commission plans to lower regulatory barriers to mining and production of critical materials such as lithium, cobalt and graphite required for wind farms, solar panels and electric vehicles.

Brazil’s other deforestation Deep in the interior of the country, the transformation of parts of the once inhospitable region of Cerrado in recent decades has helped turn Brazil into an agricultural powerhouse. But the magnitude of the degradation is worrisome to ecologists concerned about threats to the region’s role as a carbon dioxide “sink.”

It is not always the perpetrator who pays In the wake of the #MeToo movement, economists are using real-world data to study incidents of everyday sexual harassment in ordinary workplaces. As with the rich and famous, they discover that it’s not always the culprits who pay a high price, and that women are more likely to switch jobs, writes Sarah O’Connor.

Anshu Jain, banker, 1963-2022 The first non-white, non-German to run Deutsche Bank, Anshu Jain was known for his hard-charging style. He spearheaded the bank’s attempt to conquer Wall Street and got cancer like he did with professional challenges: by analyzing the problem, trying to solve it, and then moving on, writes Olaf Storbeck. Jain passed away on Friday.

Work and leisure

August is the traditional time to make yourself scarce in the office. So why are so many people still working this month, Pilita Clark asks:

At first I thought I was the only one with an unexpectedly active office. But others in town have the same problem. A friend who had hopes for a quiet, productive August crushed by office rush blames the rise of hybrid work

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