Daily Agenda: Oil Slumps Ahead of OPEC Meeting

Oil prices bounced back only modestly in early trading on Monday after a sharp sell-off on Friday ahead of this week’s Algiers summit between members of the Organization of Petroleum Exporting Countries and Russia to discuss possible production caps. Commodity Futures Trading Commission data released for the week ending on September 20 suggest that speculators are not holding out much hope for a significant outcome from the meeting, with bullish positions in listed derivatives markets declining for the 14th consecutive week while bearish bets rose. Some cash-starved smaller producers have called for large curbs while others, such as Libya and Iran, have ramped up production. The question of Saudi Arabia’s willingness to make cutbacks has been central to sentiment in crude-oil markets. There are clear signals that Saudi Arabia is increasingly feeling the pinch of low energy prices. Today the Saudi Arabian Monetary Agency, the central bank, announced a liquidity injection of more than $5 billion for lenders to combat rapidly rising rates resulting from oil-prompted withdrawals from bank coffers. The move comes in advance of Saudi Arabia’s first international bond sale which is expected to bring in $10 billion in October.

Clinton, Trump running neck and neck ahead of debate. In advance of the first presidential debate tonight between GOP nominee Donald Trump and the Democrats’ Hillary Clinton, new polling suggest the race remains close. A Bloomberg Politics national poll indicated voters were split roughly down the middle when asked to choose between the two. Separately, a poll conducted by Washington Post in conjunction with ABC news that was released on Sunday found that Clinton held a slight lead but one that had eroded from a prior 8 percent to only 2. The event will be held at Hofstra University on Long Island.

European regulators consider ChemChina Syngenta merger. In a statement issued today, the European Commission targeted a deadline of October 28 to rule on China National Chemical Corp.’s proposed $43 billion acquisition of Syngenta. U.S. officials have already blessed the deal, which would position state-controlled National Chemical, better known as ChemChina, as the world’s largest pesticide producer. The announcement comes as concerns have arisen over the competitive effects of a recent series of megamergers within the agrichemical industry.

Moody’s lowers Turkish debt to junk status. Moody’s Investors Service reduced the sovereign debt rating of Turkey on Friday to the noninvestment grade Baa3 because of weakening economic fundamentals and the geopolitical impact of President Recep Tayyip Erdogan’s handling of a July coup attempt. Both Erdogan and Economic Minister Nihat Zeybekci have sharply criticized international ratings agencies for supposed political bias after Erdogan used the unsuccessful coup to consolidate power and eliminate rivals. The Turkish lira declined against all major currencies in trading on Monday.

German business confidence improves. Data issued on Monday by the Ifo institute included the highest reading for one business sentiment index in over two years. The business climate specific survey index increased to 109.5 versus consensus forecasts for 106, while both current-conditions and expectations-specific indices also rose. As the mood in German corporate suites appears to rebound, the country’s largest lender continues to face mounting challenges. Shares of Deutsche Bank hit an all-time low in early trading on Monday as investors fret over demands by U.S. regulators that are more than double what the lender had set aside to resolve litigation over the sales of mortgage-back securities.

Cross-border acquisition in specialty chemicals. German chemical additives producer Lanxess announced an agreement today to acquire U.S. rival Chemtura Corp. in a cash deal valued at more than $2 billion. The bid, which represents an almost 20 percent premium to Friday’s closing share price for Chemtura, will be financed through bond issuance. In structuring the deal Lanxess will abandon a previously announced share-repurchase program.

Singapore firm buys a stake in Rolling Stone. Over the weekend, Wenner Media confirmed it has agreed to sell a 49 percent ownership in flagship publication Rolling Stone to BandLab Technologies, a digital music company. The move represents a partnership between two heirs: BandLab is run by Meng Ru Kuok, son Singapore agribusiness magnate Kuok Khoon Hong, while Wenner Media is led by Gus Wenner, son of Rolling Stone founder Jan Wenner. The two firms plan to partner on developing the Rolling Stone brand internationally. The iconic publication has faced pressures similar to many established media firms in recent years, as declining print advertising revenues have not been fully offset by digital ones.