Brink of default

Russia may be on the verge of default. The Credit Derivatives Determinations Committee—which includes Goldman Sachs, Barclays and JPMorgan—said Wednesday that a “potential failure-to-pay” event occurred for credit-default swaps when Russia paid rubles after foreign banks declined to process U.S. currency transfers. If Russia doesn’t pay up in dollars by the time its grace period expires on May 4, it would be the country’s first default on external debt in more than a century. Holders of the swaps could then start the process of getting paid on contracts covering about $40 billion of debt.

This potential financial calamity (for Russia) is of course tied to Vladimir Putin’s bloody war on Ukraine and the subsequent storm of sanctions that’s rained down upon him. Some eight weeks after he sent troops across his southern border, Putin has failed to take Kyiv and reportedly lost thousands of soldiers and untold amounts of equipment. Now a small but growing number of senior Kremlin insiders are quietly questioning his decision to go to war. They believe the invasion was a catastrophic mistake that will set the country back for years, if not decades.

But most Russians (fear of voicing dissent notwithstanding) tell pollsters they support Putin’s war, one in which thousands of civilians have likely been killed through seemingly indiscriminate bombing and alleged mass executions. As Russian forces now move on the Donbas, Moscow is seeking to dissuade NATO from increasing its flow of weapons. On Tuesday, Putin deputy Sergei Lavrov said Russia was against using nuclear weapons in Ukraine, but failed to give a direct answer about whether Putin might use them anyway. And on Wednesday, Russia tested a new nuclear-capable intercontinental ballistic missile, an event Putin used to issue yet another thinly veiled threat against NATO.

In its new assault in Ukraine’s east, Russia has yet to gain significant ground, Ukraine officials contend, though surrounded defenders in the blasted port city of Mariupol have warned they are close to the end. But while Russia seeks to consolidate gains along the Sea of Azov, the potential expansion of NATO along its northern border is getting closer to reality. Finland’s parliament began debate on policy changes that may pave the way for a bid to join the alliance. Putin still has friends in Beijing, at least: China said it will continue to strengthen its strategic ties with the Kremlin. —David E. Rovella

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Evidence of war crimes by Russian troops and Ukraine’s tenacious defense have led to calls by European countries for more aggressive action in support of Kyiv. But German Chancellor Olaf Scholz has been an outlier, reluctant to supply tanks and other heavy weapons or impose an embargo of Russian oil and gas. Even given some recent moves by Berlin to provide assistance, for Germany’s allies, patience with Scholz is wearing thin.

Technology stocks seeing more losses, the dollar pushing to new highs and tough times for credit. These are some of the new investor expectations now that bond markets are moving toward pre-pandemic normality, with benchmark inflation-adjusted Treasury yields climbing above zero. Here’s your markets wrap.

In the U.S., Covid-19 infections are clearly on the upswing again, with 45,000 new cases on April 18 alone. But the big question is whether the rise in hospitalizations and deaths that usually follows an infection surge will manifest this time around. But even if the linkage is broken, there’s still long Covid to worry about. In China, the overwhelmed government pledged more economic support as a worsening outbreak and huge lockdowns upend global supply chains again. Taiwan is in trouble, too.

Twitter, which is trying to defend itself against Elon Musk’s $43 billion takeover bid, has a poison pill in place. So the next obvious move on the hostile M&A to-do list is likely already being contemplated: a white knight.

Climate crisis? A new report shows how fund managers who a year ago promised to fight global warming are still sticking with fossil fuel. As for bankers trying to get their net-zero carbon dioxide targets certified, they face some new, very hard deadlines.

Israel’s central bank has decided to add the Chinese yuan to three other currencies in a stockpile that last year exceeded $200 billion.

Some of the most consequential changes come upon us silently, almost without notice, Tyler Cowen writes in Bloomberg Opinion. The world is in the midst of one right now: Our doctrines of nuclear deterrence are obsolete and in desperate need of an update, he writes. Putin’s nuclear threat is making Armageddon thinkable again.

A rare “forgotten” cask of whisky, bought for £5,000 more than 30 years ago, is expected to set a world record when it’s sold in an online auction. The 374-litre cask, originally filled in 1988, has been held in bond at the Macallan Distillery in Moray, Scotland, for almost 34 years. Bids for the rare cask have already reached £130,000 ($170,000) since the auction went live on Friday and are expected to soar before the auction ends on April 24.

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