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Merkel push for German lockdown blocked as death toll passes 100,000

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BERLIN, GERMANY – SEPTEMBER 22: German Chancellor Angela Merkel (L) speaks with Vice Chancellor and Federal Minister of Finance Olaf Scholz.

Pool | Getty Images News | Getty Images

Germany’s Covid-19 crisis continues to rock the nation with the grim news on Thursday that the total number of deaths has now surpassed 100,000.

The country’s new incoming coalition government is resisting a lockdown, for now, however.

Germany reported a massive number of new Covid cases on Thursday, with over 75,000 new infections in the last 24 hours (and up from 66,884 on Wednesday), while the death toll has now reached 100,119 after 351 more people died from the virus during the previous day.

Government officials have been watching rising cases with alarm for weeks now, and the country’s outgoing Chancellor Angela Merkel reportedly pushed for a two-week lockdown during a meeting on Tuesday with the country’s incoming coalition government.

According to the Bild newspaper, the new government alliance of the left-leaning Social Democrats and Greens and the pro-business Free Democrats pushed back against the idea, preferring instead to wait and see whether tighter Covid restrictions announced last week would work to help lower infections.

While Merkel had proposed a lockdown, to begin on Thursday, which would have seen shops, bars and restaurants close, the idea was rejected by the incoming government who said it would have been interpreted by the public as a “bad political trick” by the old and new government, Bild reported Wednesday

Compulsory vaccination

(From L to R) Christian Lindner of the German Free Democrats (FDP), Olaf Scholz of the German Social Democrats (SPD and, Annalene Baerbock and Robert Habeck of the Greens Party pose after presenting their mutually-agreed on coalition contract to the media on November 24, 2021 in Berlin, Germany.

Sean Gallup | Getty Images News | Getty Images

After the coalition’s deal and policy ambitions were announced Wednesday, Scholz signaled that the Covid crisis was an immediate priority for the government. He begun a news conference announcing the coalition deal by saying that the virus situation in Germany was serious and that the country would expand its vaccination campaign, including mandating vaccines for some people.

“Vaccination is the way out of this pandemic. In institutions where vulnerable groups are cared for, we should make vaccination compulsory,” Scholz said, without specifying further details. 

Meanwhile, incoming Finance Minister Christian Lindner stated that Germans should avoid all unnecessary contact this winter “to preserve all of our health in this pandemic.”

Germany has already tightened Covid rules amid the latest fourth wave of cases in the country.

Many states in Germany have already restricted access to public spaces like bars, restaurants, movie theaters and museums under “2G rules,” restricting access to only those who are vaccinated — “geimpft” in German — or recovered, “genesen.” A number of major German Christmas markets which have not been canceled this year have also adopted 2G rules.

On Wednesday, new measures came into force imposing “3G” rules on public transport and anyone going into a workplace, meaning that more public spaces are restricted to the vaccinated, the recently recovered, or those that have had a negative test (“getestet”).

Vaccine hesitancy, the incoming winter season and the spread of the highly infectious delta Covid variant, which is far more virulent than previous strains, make the virus far harder to contain this time around for Germany, a country widely praised for its initial handling of the pandemic.

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IEA chief criticizes artificial tightness in energy markets

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Petroleum pump jacks are pictured in the Kern River oil field in Bakersfield, California.

Jonathan Alcorn | Reuters

The head of the world’s leading energy authority has said that some countries had failed to adopt a helpful position to calm soaring oil and gas prices, criticizing “artificial tightness” in energy markets.

“[A] factor I would like to underline that caused these high prices is the position some of the major oil and gas suppliers, and some of the countries did not take, in our view, a helpful position in this context,” Fatih Birol, executive director of the International Energy Agency, said Wednesday during a press webinar.

“In fact, some of the key strains in today’s markets may be considered as artificial tightness … because in oil markets today we see close to 6 million barrels per day of spare production capacity lies with the key producers, OPEC+ countries.”

His comments come as energy analysts assess the effectiveness of a U.S.-led pledge to release oil from strategic reserves to stymie surging fuel prices.

In the first such move of its kind, President Joe Biden announced a coordinated release of oil between the U.S., India, China, Japan, South Korea and the U.K.

The U.S. will release 50 million barrels from the Strategic Petroleum Reserve. Of that total, 32 million barrels will be an exchange over the next several months, while 18 million barrels will be an acceleration of a previously authorized sale.

OPEC and non-OPEC producers, an influential group often referred to as OPEC+, have repeatedly dismissed U.S. calls to increase supply and ease prices in recent months.

Birol said the IEA recognized the announcement made by the U.S. parallel with other countries, acknowledging surging oil prices had placed a burden on consumers around the world.

“It also puts additional pressure on inflation in a period where economic recovery remains uneven and still faces a number of risks,” he added.

Birol said he wanted to make clear that this was not a collective response from the IEA, however. The Paris-based energy agency only acts to tap energy stocks in case of a major supply disruption, he said.

‘A new and unchartered price war’

Oil prices have jumped more than 50% year-to-date, hitting multi-year highs as demand outstripped supply. The momentum behind the price rally has even tempted some forecasters to predict a return to $100-a-barrel oil, although not everyone shares this view.

International benchmark Brent crude futures traded at $82.27 a barrel on Monday afternoon in London, down around 0.1%, while West Texas Intermediate crude futures stood at $78.47, little changed for the session.

“A new and unchartered type of price war is brewing in the oil market,” Louise Dickson, senior oil markets analyst at Rystad Energy, said on Wednesday in a research note.

“The world’s biggest consumers of oil have pledged an unprecedented and relatively sizeable release of strategic reserves onto the market to quell high oil prices amid pandemic recovery.”

Rystad Energy said that if the oil set to be released from the U.S., China, India, Japan, South Korea and the U.K. started as early as mid-December, it could be enough to outpace crude demand as soon as next month.

“This begs the question of just how strategic the timing is from Biden, Xi and others if fundamental reprieve is already just around the corner in 1Q22,” Dickson said.

“The release may be a case of too much, too late, as the oil market was tightest and needed supply relief in September,” she added.

— CNBC’s Pippa Stevens contributed to this report.

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India may tighten rules, not impose outright ban, Zebpay says

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India is set to propose a new cryptocurrency bill in parliament, and investors are trying to make sense of what this might mean for the future of virtual coins in South Asia’s largest economy.

Lawmakers may ultimately opt to impose tough regulations on the crypto market instead of an outright ban on private coins, according to a top executive at Zebpay, one of India’s largest crypto exchanges.

“My belief is that we will have some kind of coherent regulation, but on the tougher side,” said Avinash Shekhar, co-CEO of Zebpay, told CNBC’s “Squawk Box Asia” on Thursday.

A parliamentary bulletin dated Nov. 23 showed that the government plans to introduce a new bill aimed at regulating digital currencies when Parliament begins its winter session starting Monday.

Through that bill, India is seeking to ban most private cryptocurrencies as well as to establish a framework for creating an official digital currency to be issued by the Reserve Bank of India. However, it will allow “for certain exceptions to promote the underlying technology of cryptocurrency and its uses,” the bulletin said.

… the feelers which we are getting from the government is that they’re looking for some kind of regulation, strict regulation, but not a complete ban.

The central bank is considering a digital Indian rupee that could reportedly launch a pilot in the second quarter of 2022.

Shekhar told CNBC that in the last eight to nine months, the government’s stance on cryptocurrencies changed after officials consulted with various stakeholders including crypto exchange operators.

“There has been lots of positive vibes from the government. We met the finance committee of Parliament around two weeks back,” he said. “The message or the feelers which we are getting from the government is that they’re looking for some kind of regulation — strict regulation, but not a complete ban.”

In March, India was considering a law that would ban cryptocurrencies, fine anyone trading in the country or even holding such digital assets, Reuters reported, citing a senior government official.

Since then, New Delhi has changed its stance slightly and is now trying to discourage trading in crypto by imposing hefty capital gains and other taxes, according to the news agency.

Prime Minister Narendra Modi this month gave a keynote address at the Australian Strategic Policy Institute’s The Sydney Dialogue where he said all democratic nations must work together on crypto to “ensure it does not end up in wrong hands, which can spoil our youth.”

When Finance Minister Nirmala Sitharaman was asked by the Hindustan Times if India should have its own cryptocurrency, she reportedly said, “We have to be cautious; but we have to think it through.”

Shekhar from Zebpay said officials have been talking about tough regulations because “they want to obviously control this and don’t let crypto become a currency, so to say.”

Read more about cryptocurrencies from CNBC Pro

He explained that potential regulations would have to address the needs of India’s retail investors — while there is no official data currently available, media reports suggest there are about 15 million to 20 million crypto investors in the country.

“The other side, which is not being talked about too much, is innovation in the technology,” Shekhar said, adding that many innovators are still waiting to enter the crypto market.

“With regulation coming in, I think that will be a major area where I think multibillion dollar companies will be created in India,” he added.

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European markets face Covid headwinds

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LONDON — European stocks are expected to open higher on Thursday as investors continue to monitor the Covid crisis in the region and political developments in Germany.

The U.K.’s FTSE index is seen opening 18 points higher at 7,303, Germany’s DAX 59 points higher at 15,955, France’s CAC 40 up 30 points at 7,078 and Italy’s FTSE MIB 154 points higher at 27,233, according to data from IG.

Investors will be digesting the latest news out of Germany where a new coalition government deal between the Social Democrats, Greens and Free Democrats was announced on Wednesday.

The agreement will see Olaf Scholz, Germany’s former finance minister, become Germany’s new chancellor when Angela Merkel leaves the post in early December.

European investors continue to monitor the acute Covid crisis in the region this week amid rising infections that have prompted a handful of countries to introduce new Covid restrictions.

Italy announced Wednesday evening that it will introduce tighter Covid measures and Germany has narrowly avoided another lockdown with the incoming coalition reportedly wanting to wait and see if tighter Covid passport rules help to alleviate rising cases there. Nonetheless, incoming German leader Olaf Scholz said Wednesday that vaccinations are to be made compulsory for targeted groups.

Stock picks and investing trends from CNBC Pro:

Overnight in Asia-Pacific markets, shares were mixed as investors reacted to the Bank of Korea’s decision to raise its policy rate to 1%. The South Korean central bank’s decision followed a similar move by the Reserve Bank of New Zealand on Wednesday.

U.S. markets are closed Thursday for Thanksgiving and will close early on Friday in a shortened session.

On the data front, a detailed picture of Germany’s third-quarter gross domestic product (GDP) will be released and the December reading of Germany’s GfK consumer sentiment barometer is due.

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