Market Report.
🇺🇸 The United States has imposed sanctions on Russia’s two largest oil companies, Rosneft and Lukoil, in response to Moscow’s lack of commitment to a peaceful resolution of the war in Ukraine. The sanctions, announced by the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC), are intended to degrade the Kremlin’s ability to generate revenue for its war efforts.
⚙️ The designations apply to Rosneft Oil Company and Lukoil OAO, as well as 34 of their subsidiaries involved in oil production, refining, and technology development across Russia. The sanctions were enacted due to Russia’s refusal to engage in good-faith negotiations to end the war in Ukraine. Russian demands, on the other hand, have originally been the same, since the origin of the Ukrainian conflict, the refusal to NATO’s insistence on deploying military bases in a country so close to Moscow.
🌍 The U.S. has encouraged allies to enforce similar measures, and foreign financial institutions risk secondary sanctions for facilitating significant transactions with the designated parties. Flows of Russian oil to major Indian refiners are expected to fall to near zero after the U.S. imposed sanctions on Russian oil giants Rosneft and Lukoil. India is the world’s top buyer of Russian oil.
🇮🇳 The sanctions on Rosneft and Lukoil are likely to severely disrupt India’s ability to continue purchasing large volumes of Russian crude oil, which has been a key part of India’s energy supply in recent years.
💰 The US imposed a 50% tariff on Indian exports in August 2025 after trade negotiations stalled and India continued to purchase Russian oil despite US pressure to cut these imports. Initially, President Trump levied a 25% “reciprocal” tariff, which was followed by an additional 25% penalty specifically tied to India’s Russian oil purchases.
⚖️ However, the Indian Ministry of External Affairs condemned the tariffs as unfair, unjustified, and unreasonable, stating India’s energy purchases are dictated by market factors and national security needs for its population of 1.4 billion. Modi stated, “I know we will have to pay a heavy price for it and I am ready for it. India is ready for it”.
🤝 President Trump said he plans to discuss China’s purchases of Russian oil with Chinese President Xi Jinping when the two leaders meet next week in South Korea. In addition to the war in Ukraine, Trump said he expects to resolve an ongoing dispute over access to rare earth exports from China and win a promise from Beijing to resume purchasing U.S. soybeans.
📝 Trump expressed optimism about reaching deals on these various issues, stating “We’ll make a deal on, I think, everything” during his meeting with Xi.
🇬🇧 In UK, a potential measure being discussed is reducing VAT on home energy prices, which could help lower inflation and allow the BoE more flexibility to cut interest rates, potentially providing some relief for the struggling pound.
🏦 The Bank of England’s top financial regulator, Sam Woods, has criticized the banking industry’s push for more favorable treatment of government bonds in capital requirements. Woods warned that calls to exclude government bond holdings from overall measures of banks’ leverage would be a “profound – and highly risky – change” that could lead to a “very large increase” in lenders’ leverage.
📉 He used the example of the 2023 collapse of Silicon Valley Bank, which failed due to improperly hedging the interest rate risk from its extensive government bond holdings, as evidence of the serious risks that government bonds can pose to bank balance sheets.
📊 Woods’ comments come amid growing concerns about a deregulatory spirit in the UK financial sector, with banks arguing an exemption for gilts will help them absorb the large amount of government debt expected to hit the market.
💷 The Bank of England is pursuing quantitative tightening by selling down its gilt holdings, while the UK government will also be issuing significant new debt, increasing the pressure on banks.
🚗 Tesla reported a 12% increase in third quarter revenue compared to the same period last year, but its earnings missed analyst estimates, causing the stock to drop nearly 5% in after-hours trading.
🔋 Tesla’s automotive revenue increased 6% to $21.2 billion, but its net income fell 37% to $1.37 billion, reflecting lower EV prices and a 50% increase in operating expenses. The end of federal tax credits for electric vehicles in the U.S. pulled sales forward into the previous quarter as consumers rushed to take advantage of the incentive before it expired.
🇪🇺 Tesla’s sales in Europe continued to slump, driven by competition from other EV makers.
📉 Volkswagen faces a significant setback as it halts production of its Golf and Tiguan models at its main Wolfsburg plant in Germany starting Wednesday due to a shortage of chips, according to CNBC. This disruption follows the Netherlands’ forcible seizure of the Chinese company Nexperia, a key chip manufacturer, exacerbating supply chain challenges for the automotive giant.
Market View.
📈 US markets experienced some declines yesterday, but futures have regained momentum and are once again facing certain resistance levels. Mini S&P 500 futures, which managed to surpass 6,800 points on Tuesday, now have to fight against this resistance again following yesterday’s declines. Nasdaq 100 futures are in a similar situation, retreating from highs in the 25,345-point zone to the current 25,100 points.
💵 The dollar index (DXY) is now above 99 points. EUR/USD has fallen below 1.16 and is currently trading at 1.1595.
📊 In Europe, DAX 40 futures lost the ground they had regained and are currently struggling to return to an upward trend, trading at 24,260 points. EuroStoxx 50 futures also retreated yesterday but remain at 5,656 points.
🛢️ Crude oil has seen a spectacular rise in recent hours following announcements of sanctions on Russian oil by Trankim. Brent crude has approached $65 per barrel, a resistance zone and former support level lost earlier this month.
🏆 Gold futures are still trying to hold above $4,100 following this week’s declines. These drops were more than expected, considering the verticality of gold’s recent rise, as we warned a few days ago.
₿ Bitcoin continues to build support above $108,000 and is currently attempting a bullish move, approaching $110,000.
