And another big private credit fund has limited withdrawals.
Happy Wednesday and welcome to your morning wrap of the latest business and political headlines from around the world.
We begin once again in the Middle East, where Pakistan’s prime minister said he was willing to host talks between the US and Iran on ending the war in the Gulf, Reuters reported.
It comes a day after US President Donald Trump postponed threats to bomb Iranian power plants in the wake of “productive” talks.
In a post on social media, Prime Minister Shehbaz Sharif said Pakistan welcomed and fully supported ongoing efforts to pursue dialogue to end the war.
"Subject to concurrence by the US and Iran, Pakistan stands ready and honoured to be the host to facilitate meaningful and conclusive talks for a comprehensive settlement," he said.
A Pakistani government source told Reuters that discussions on a meeting were at an advanced stage and, if it did happen – “a big if” – it would take place within a week.
US Secretary of State Marco Rubio will also travel to France this week to try to sell America’s G7 allies on the strategy of the Iran war, Associated Press reported. The member nations – Britain, Canada, France, Germany, Italy and Japan – have reacted coolly at best to the US-Israel operation against Iran and have declined to participate, drawing Trump’s ire.
On the ground, there have been no signs of the conflict abating in the Gulf or Lebanon, where Israel is carrying out separate operations against the Iranian-backed militant group Hezbollah, which has attacked Israel.
Israeli Defence Minister Israel Katz has announced plans for his country to take control of Southern Lebanon from the Israeli border to the Litani River, the ABC reported. Katz described the move as creating a “security zone” during a briefing.
"Hundreds of thousands of residents of southern Lebanon who evacuated north will not return south of the Litani River until security is guaranteed for residents of the north," he said. "The principle is clear: there is terror and missiles, there will be no homes and residents – and the IDF will be inside."
The Israeli Defence Force (Source: Wikimedia Commons.)
Meanwhile, oil prices have crept back over US$100 a barrel as optimism fades over a quick de-escalation of the conflict.
There was a sharp sell-off earlier in the week after Donald Trump’s social media post in which he said he had postponed military strikes against Iranian power plants and mentioned “productive” talks that had occurred.
However, Brent crude, which is the global benchmark, is up more than 4% to US$104.28 a barrel amid scepticism over Trump’s claims.
“Despite the exuberance on Wall Street, ladies and gentlemen, oil is well off its lows after Tehran denied conducting any weekend negotiations with Washington,” Interactive Brokers senior economist José Torres said in a note that was quoted by CNBC.
He said the risk of a protracted war was top of mind for the market.
On Wall Street, the Dow Jones, the S&P 500, and the Nasdaq were down 0.2%, 0.3% and 0.9%, respectively, after yesterday’s rally.
Bond yields have also surged, with the US 10-year Treasury, which is regarded as a benchmark for risk-free returns, rising 7 basis points to 4.412%. The yield on the 10-year is up more than 40 basis points.
In other news, at least five people have been killed overnight in a massive wave of Russian air strikes across Ukraine, the BBC reported, citing local officials.
A 61-year-old woman was killed when a drone hit an electric train in Kharkiv early on Tuesday, while other deaths were reported in Zaporizhzhia, Kherson and Poltava.
Officials said the attacks were among the worst in 10 days and came hours after Ukrainian President Volodymyr Zelensky warned of a forthcoming “massive strike” in his nightly address.
The Ukrainian Air Force said seven ballistic missiles, 23 cruise missiles, four air-launched guided missiles and 392 drones were used in the attack.
Volodymyr Zelensky.
In business news, there are more concerns about the state of the private credit market, as Ares Management has limited withdrawals from its US$10.7 billion fund, the Financial Times reported.
The fund has limited withdrawals from one of its marquee funds pitched to wealthy investors, as redemptions surged to 11.6% in the first quarter.
The investment group said it had capped redemptions from the Ares Strategic Income Fund at 5%, which is a threshold built into the fund that allows it to limit outflows in any one quarter.
The decision follows similar moves by many of its biggest competitors, including Apollo Global Management and BlackRock.
The US$2 trillion private credit asset class has been rocked by a surge in redemptions this year, raising questions about its health.
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