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Reuters
5 hours ago
- Reuters
Oil markets seen bearish after Trump-Putin Alaska meeting
LONDON, Aug 16 (Reuters) - Oil markets are set for a muted price reaction when they open on Sunday after U.S. President Donald Trump's and Russian leader Vladimir Putin's meeting in Alaska, at which Trump said a fully-fledged peace deal was the aim for Ukraine rather than a ceasefire. Trump said he had agreed with Putin that negotiators should go straight to a peace settlement - not via a ceasefire, as Ukraine and European allies, until now with U.S. support, have been demanding. Trump said he would hold off imposing tariffs on countries such as China for buying Russian oil following his talks with Putin. He has previously threatened sanctions on Moscow and secondary sanctions on countries such as China and India that buy Russian oil if no moves are made to end the Ukraine war. "This will mean Russian oil will continue to flow undisturbed and this should be bearish for oil prices," said ICIS analyst Ajay Parmar. "It is worth noting that we think the impact of this will be minimal though and prices will likely see only a small dip in the very near term as a result of this news." The oil market will wait for developments from a meeting in Washington on Monday between Trump and Ukrainian President Volodymyr Zelenskiy. European leaders have also been invited to the meeting, a source familiar with the matter told Reuters. "Market participants will track comments from European leaders but for now Russian supply disruption risks will remain contained," said Giovanni Staunovo, analyst at UBS. Brent settled at $65.85 a barrel on Friday, and U.S. West Texas Intermediate at $62.80 - both down nearly $1 before the talks in Alaska. Traders are waiting for a deal, so until that emerges, crude prices are likely to be stuck in a narrow range, said Phil Flynn, a senior analyst with Price Futures Group. "What we do know is that the threat of immediate sanctions on Russia, or secondary sanctions on other countries is put on hold for now, which would be bearish," he said. After the imposition of Western sanctions, including a seaborne oil embargo and price caps on Russian oil, Russia has redirected flows to China and India.
Times
8 hours ago
- Times
Traders, not bankers, are the masters of London's finance universe
This was supposed to be the year of the dealmaker as animal spirits revived. But once again it is the traders at banks and hedge funds that are the top dogs. Nowhere is this more so than in London. My first job in the late nineties was on one of the largest bank trading floors in the City. I vividly remember the roar of the floor: hundreds of traders shouting prices down the phone to their clients, yelling trades across the floor to colleagues and tapping away furiously on large clunky Bloomberg terminals. Investment banking dealmaking in IPOs and M&A has always been big business for banks. But this sector has struggled since the pandemic, despite signs that deals are returning thanks to the AI boom: the US software maker Figma saw its share price rise 250 per cent on the day it listed. Yet investment banking revenues are a shadow of previous bubbles, and the majority of it comes from less sexy debt underwriting. By contrast, the trading desks of banks have grown much faster — mainly due to high volatility in markets, the enduring success of 'buy the dip' strategies, and a massive growth in hedge fund trading. Just take a look at the earnings of the major banks: Goldman Sachs has seen its markets revenue double since 2019, but its investment banking business hasn't grown. And despite a concerted effort by adding deal makers, in the second quarter of 2025 Barclays' revenues in equity capital markets were only £81 million, while M&A advisory was just £123 million; its markets business revenues were £2.3 billion. Much of the boom in trading has come from hedge funds and other leveraged players, which raise finance from the major banks. This business now makes up a third of the markets revenue at firms such as Goldman and Barclays. According to the US Treasury, the pace of hedge fund borrowing has increased significantly. This is partly owing to rising markets and higher assets under management (AUM). But leverage has risen considerably for the largest 50 hedge funds in the world. These days, the star traders are just as likely to be at a hedge fund than a bank. 'Pod shop' hedge funds are at the vanguard. These are distinct from other hedge funds because they have large numbers of separate investment teams. The largest, Millennium Management, has more than 320 of these 'pods' of traders. Pods can be like running your own business but outsourcing all the non-investment functions. The central pod shop team raises money (typically one master fund), speaks to clients and manages infrastructure such as technology. Firms such as Citadel, which employs more than 265 PhDs, are known as pioneers in data and have the scale to win in the AI age. Pod shops aim to be market neutral, relying on portfolio diversification and lashes of leverage to eke out adequate consistent returns. Each pod is an expert in a specific area whether it be trading tech stocks or European interest rates but is set strict limits in terms of diversification, liquidity and market exposure. Risk limits are tight with capital pulled from pods when they have drawdowns and pods closed if they are down 7 per cent. The biggest ten pod shops may have only $300 billion of AUM, but they have 20,000 employees. The largest are of the scale of an investment bank. Given their trader mentality and the Darwinian survival-of-the-fittest approach, pod shops tend to hire from other hedge funds or bank trading desks and have a high employee churn rate of about 15-20 per cent a year. Just like bank trading desks, the vast majority of their traders are young men below the age of 40. While most pod shops are based in the US, they have sizeable London offices, cementing the UK's enduring position as a hot spot for trading. At the same time, there has been a significant growth of multi-strategy hedge funds that have similarities to pod shops but with a more centralised approach to investing. The largest of these, a British hedge fund with a London headquarters, is Marshall Wace, which has more than $70 billion in AUM and 700 employees. London has always had a conveyor belt from bank trading desk to hedge fund. This includes the founders of names such as Rokos, Brevan Howard and Capula. There is some movement of talent to the UAE, but several of the fastest-growing, newer firms in the industry including quant fund QRT (Qube Research & Technologies) and credit fund Arini are London-based. In the adjacent universe of high-frequency trading, XTX Markets illustrates the vibrancy of London's trading community. Investment bankers are natural salespeople who like to go on TV to talk up dealmaking, but bank and hedge fund traders are where the money is. And it is likely to remain that way for the time being. But a word of caution: the image that you conjure up when you hear the word 'trader' may need to change. The world of the alpha trader who relied on their gut instinct, market chatter and the huge firepower and risk appetite of their banks to take large positions disappeared after the financial crisis. Exchanges are now all electronic, and customers such as big hedge funds are increasingly data-driven and execute electronically; most of a bank's trades are priced by algorithms with the quant and tech guys making the trading floors of today much quieter. It has been said that at its height, in 2000, Goldman Sachs employed 600 US cash equity traders and that two decades later there were almost none, as the business was being done with algorithms. In complex derivatives, less liquid financial instruments or very large trades, there remains a need for the human trader — but the computers keep getting better. Rupak Ghose is an adviser to fintech companies and a former financials research analyst
Spectator
10 hours ago
- Spectator
The 12 minutes of the Trump-Putin summit that shook the world
The Trump-Putin press conference in Anchorage was 12 minutes that shook the world. Putin got precisely what he wanted, which was full personal rehabilitation as a respectable world leader. Donald Trump literally rolled out the red carpet for Putin and at the presser said that he had 'always had a fantastic relationship with President Putin, with Vladimir.' And though no deal was done over Ukraine, what Putin achieved was something far more valuable – a re-set of relations between Russia and the US. Putin admitted that bilateral ties had fallen to the 'lowest point since the Cold War' but called for both sides to move on. 'Not far from here lies the international date line where one can literally step from yesterday into tomorrow,' said Putin. He spoke of a 'constructive atmosphere of mutual respect,' of 'mutually beneficial and equal ties' and twice called the newly reset relationship with America 'businesslike'. Trump, for his part, praised both Putin and his team of 'tremendous Russian business representatives.' True, a planned lunch for the two delegations and a second, expanded round of talks was cancelled. Three of the five senior economics officials that Putin had brought didn't get to sit down with their US counterparts. But that was because the Russians decided that they had already got what they had come for. 'The way that it felt in the room… like Putin came in and steamrolled,' reported Fox News correspondent Jacqui Heinrich. Putin 'got right into what he wanted to say and got his photo next to the president and then left.' Though no deal was reached, Putin did come away from the summit with one very significant practical victory. The Anchorage summit effectively swept away all of Trump's previous ultimatums and threats of 'severe consequences' and replaced them with an open-ended negotiation framework that buys Putin time. More, Putin was able to pretend to be seeking peace and negotiation while in reality escalating offensive operations in Ukraine. And perhaps most important of all Putin made clear that he was not interested in a ceasefire but rather a comprehensive peace deal to be negotiated even as his forces continue their grinding advance in Donbas. And Putin clearly believes that Trump will be a pushover at the negotiating table. 'Trump may sincerely want to end the war, but he does not have the mental capacity to negotiate with Putin,' wrote Janis Kluge of the German Institute for International and Security Affairs. 'You can't be tough if you don't understand the nuances of the issue you are negotiating. The result is that [Trump] gets manipulated.' What was striking was how carefully the Kremlin had planned the choreography of the summit. The very location of Alaska – loaded with symbolism not only of a lost Russian Empire but also of second world war US-Soviet cooperation – was the idea of veteran Russian diplomat Yury Ushakov. Meeting at the point of the North Pacific where Russia and America nearly touch also allowed Putin to greet Trump as his 'dear neighbour'. Enroute to the summit Putin stopped off at the former Gulag town of Magadan and there laid flowers at a monument to Soviet and American soldiers who were killed ferrying thousands of American planes gifted under Lend-Lease to the Soviet war effort. The symbolism was clear. Putin was honouring the men who died 'for our common victory' over Nazism, he told reporters. By implication, the US and Russia could unite again to oppose the supposedly Nazi regime in Kyiv. Putin's talking points were also precisely measured. He knows exactly what to say to please Trump, from confirming that the war would not have started if Trump had been president in 2022, to agreeing with Trump that Russian electoral interference in the 2016 US election was a 'hoax'. Appealing to Trump's greed, Putin spoke of the 'tremendous potential' for business cooperation. And to the outrage of many Ukrainians, Putin called the war that he himself started a 'terrible tragedy for us' and a 'wound' and insisted that Russians considered Ukrainians a 'brotherly nation'. That is a clear echo of a common Russian narrative that the war was fomented by western interference in Kyiv's affairs. It was also clear that the Kremlin's position has barely changed since 2022. When Putin speaks of the 'root causes' of the conflict he is saying that he sees an independent Ukraine that has the ability to defend itself is a fundamental threat to Russia. When he calls for a 'fair balance of security' Putin means restrictions on Nato deployments in the Baltics, Poland and Romania. Small wonder that ultranationalist Russian philosopher Alexander Dugin called the summit 'excellent… the best result that we could expect!' Hungary's prime minister Viktor Orbán wrote that 'the world is a safer place today than it was yesterday' as a result of the summit. The big question now is whether Trump will follow up by putting more pressure on Russia – or more pressure on Ukraine to capitulate. Trump will meet with Zelensky on Monday in the Oval Office to discuss what Trump called 'points that we negotiated [with Putin] and points that we largely have agreed upon. I think we have agreed on a lot… Ukraine has to agree to it, maybe they'll say no.' For Zelensky, the choice will be to agree to the terms Trump negotiated over his head – or refuse, and try to fight on with European help. Unfortunately for Ukraine, Putin doesn't seem to care whether the endgame of the war plays out on the negotiating table or the battlefield. Putin believes that he can win either way.
