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Today’s agenda: Nvidia’s $100bn OpenAI investment; German M&A tactics; DR Congo cobalt exports; and EU ban on deforestation-linked imports
Good morning. We begin with planned talks today between Donald Trump and Javier Milei of Argentina, who are scheduled to meet in New York. They are expected to discuss a potential financial lifeline for one of the US president’s few allies in Latin America.
What happened: Argentina’s assets slumped after Milei’s party fared worse than expected in a regional election this month, fuelling investor concern over whether the libertarian can expand support for his pro-market reform agenda in midterm elections next month. The central bank ploughed more than $1.1bn into propping up the peso over three days, alarming bondholders who fear the monetary authority could burn through much of its scarce foreign exchange reserves if volatility continues.
Possible US moves: Treasury secretary Scott Bessent said yesterday that “all options” were on the table to offer financial support to Trump’s ally. Washington would consider an intervention to buy pesos or Argentina’s sovereign debt, Bessent said.
Market reaction: The peso rallied after Bessent’s pledge, strengthening 6 per cent yesterday. Yields on Argentina’s dollar debt, which move inversely to prices, fell 3.7 percentage points, though they remain more than 10 points above comparable US Treasuries. Here’s the full story.
Here’s what else we’re keeping tabs on today:
Economic news: The Eurozone, France, Germany, the US and the UK issue manufacturing and services purchasing managers’ indices, while the OECD makes its interim economic outlook report.
Results: Kingfisher, Micron Technology, Smiths Group and Tui Group report earnings. Our Week Ahead newsletter has the full list.
UN general debate: The six-day annual meeting of world leaders starts today in New York under the theme “Better together: 80 years and more for peace, development and human rights”.
Indonesia: The EU is expected to sign a trade agreement with the south-east Asian country in Bali.
Five more top stories
1. Nvidia has announced plans to invest up to $100bn in OpenAI in return for a significant stake in the ChatGPT maker, as part of a joint effort to build data centres for artificial intelligence. OpenAI is looking at buying millions of Nvidia’s AI processors under a deal to deploy up to 10 gigawatts of capacity, the equivalent output of 10 nuclear reactors. Read more on the record-breaking mega-deal.
2. Companies and private equity groups pursuing takeovers of German businesses are shifting tactics to circumvent a popular practice pioneered by hedge funds. The “back-end trade” enabled investors to take stakes in targets before seeking higher prices for their shareholdings through legal proceedings, complicating planned deals.
3. The EU is discussing plans to postpone a ban on imports linked to deforestation for a second time, after pressure from the US and other trading partners. Several European capitals back the delay, arguing their companies are not ready to comply with the legislation, which prohibits imports such as coffee, cocoa and palm oil if producers are unable to prove their products were not grown in deforested areas.
4. Exclusive: A Chinese cargo ship has docked in Sevastopol in Crimea, making an unprecedented series of stops by a major foreign vessel to one of the Ukrainian ports under Moscow’s control. Western sanctions have barred use of the port since 2014 and, while China has not adopted the west’s sanctions regime against Russia, its commercial ships have previously avoided Russian-held ports.
Putin’s dangerous game: Moscow may gradually increase its provocation in the Baltics to test Nato, writes Gideon Rachman.
5. Exclusive: The $10bn investment firm of Binance co-founder Changpeng Zhao is considering opening up to external investors in future. YZi Labs, which invests in crypto start-ups, biotech and AI, is one of the biggest crypto investors in the world. Nikou Asgari has more details.
Join us tomorrow at 1.30pm UK time for the livestreamed announcement of the Financial Times and Schroders Business Book of the Year shortlist. The £30,000 prize honours the most compelling and enjoyable insight into modern business
The Big Read
As the UN turns 80, wars are raging in Ukraine, Gaza and Sudan, its core ideas are in tatters and the world no longer seems to be listening. Can the organisation save itself from irrelevance?
We’re also reading . . .
Palestinian statehood: Long-overdue recognitions by Israel’s key western allies bolster the notion that lasting peace requires a settlement that addresses both sides’ legitimate concerns, the FT editorial board writes.
Cobalt exports: The Democratic Republic of Congo, the world’s biggest producer of the key ingredient in electric vehicle batteries, is ending a seven-month ban on exports and introducing a quota system.
‘Peerveillance’: Are we on course to become a Little Brother society as spy tech becomes smaller, smarter and cheaper, asks Sarah O’Connor.
Pharmaceutical ‘stampede’: Lured by the hefty price gap, Irish bargain-hunters are surging across the border into Northern Ireland for a weight-loss jab whose active ingredient is made in their own country.
Chart of the day
House buying costs in Europe vary from zero to thousands of euros. This tax roulette is a sign of the impact of government policy on the cost of the biggest financial transaction most people make in their lives.
Take a break from the news . . .
For FT Globetrotter’s guide to Venice, Amy Kazmin finds respite from the crowds in the thriving creative neighbourhood of Giudecca, a tranquil haven where locals and artisans live and work in an extraordinary setting.
