FirstFT: Rift between Canada and India deepens

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Good morning.

We start today with a deepening rift between Canada and India after Justin Trudeau said there were “credible allegations” that the New Delhi government was involved in the fatal shooting of a prominent Sikh leader in British Columbia earlier this year.

Citing intelligence from national security services, Trudeau told members of parliament yesterday that Canadian authorities were investigating whether “agents” of New Delhi were behind the June killing of Hardeep Singh Nijjar in a suburb of Vancouver.

Canada also expelled a top Indian diplomat, according to the country’s foreign minister Mélanie Joly.

India today dismissed Trudeau’s claims as “absurd” and retaliated by asking a senior Canadian diplomat to leave the country in the latest sign of tension between the G20 allies.

Canada is home to nearly 800,000 Sikhs, many of whom live in Surrey, a suburb of Vancouver, and Brampton, outside Toronto. Some Sikh Canadians support the Khalistan independence movement, which seeks to create a sovereign state in India’s northern Punjab state.

India’s government condemns the movement and has long accused Canada of harbouring Sikh separatists, whom it describes as “Khalistani terrorists and extremists”. Read the full story.

Here’s what else I’m keeping tabs on today:

• United Nations: US president Joe Biden and Ukraine’s Volodymyr Zelenskyy will address the UN General Assembly today in New York. However, the organisation’s relevance is being questioned as key leaders skip the annual event.

• Instacart begins trading: Shares in the online grocery delivery service will debut at $30 a share on Nasdaq, in the latest victory for the stock exchange over its great rival the New York Stock Exchange.

• FTX’s SBF: A federal appeals court is scheduled to hear FTX founder Sam Bankman-Fried’s request to be freed from jail, as he appeals the ruling of Judge Lewis Kaplan to place him in custody after finding that the cryptocurrency entrepreneur probably attempted to tamper with witnesses.

• Economic data: Construction of new US residences is expected to have fallen in August compared with July. Canada publishes its annualised inflation reading for August.

Some of the biggest names in retail will gather today for the FT’s Future of Retail summit. Join the chief executives of Harvey Nichols and luxury goods group Tapestry. The event will be broadcast live and you can register here.

Five more top stories

1. The leader of the United Auto Workers union threatened to extend strike action at three Detroit car plants from Friday if “serious progress” was not made in pay talks with leaders of the carmakers in the coming days. The threat of escalation came as 5,700 car workers threatened to walk out of a Ford car factory in Canada. Here’s the latest on the dispute.

2. Central banks should hold interest rates at their current high levels or raise them further to defeat inflation, the OECD said today as it downgraded its 2024 growth forecast. The advice comes ahead of crucial decisions this week by the US Federal Reserve, Bank of England and Bank of Japan. Chris Giles unpicks the OECD’s latest economic outlook.

3. Oil prices hit their highest level of the year earlier today as the decision by Saudi Arabia and Russia to extend production cuts pushes the cost of a barrel of oil near to $100. The increase in oil prices has led to fears central banks may have to push interest rates higher to contain inflation threatening the resilience of the global economy. Here’s an explainer on why oil prices are at year highs.

4. US financial watchdogs are pushing ahead with a crackdown on deceptive fund names, despite industry warnings that it will discourage stock picking, violate free speech protections and force funds to sell assets at a loss when markets are volatile. The overhaul would require funds to prove that 80 per cent of their holdings match their names.

• Hedge funds: A build-up of leveraged bets has the potential to “dislocate” trading in the $25tn US Treasuries market, said the umbrella group for central banks.

5. The US has launched a co-operation pact with dozens of countries touching the Atlantic Ocean in Europe, Africa and the Americas, as Washington seeks to strengthen economic, environmental and scientific ties across the region. The “Partnership for Atlantic Cooperation” was agreed on the eve of the UN General Assembly meetings in New York today. Read more on the new pact.

The Big Read

The recent Microsoft/Activision saga has pointed to the UK competition regulator’s newfound clout on the global regulatory stage and raised questions about its decision-making. Critics say the Competition and Markets Authority is taking big swings as it works out its place in the world, but supporters say its more resolute stance on policing large takeovers comes at a time when competition authorities in the US are also adopting a more assertive approach.

We’re also reading . . . 

Chart of the day

Germany’s central bank warned companies yesterday to reduce their dependence on China. The Bundesbank said 29 per cent of German companies imported essential materials and parts from China, exposing their operations to “significant” damage if this trade route were to be disrupted as a result of “increasing geopolitical tensions”.

Take a break from the news

Iranians have found few reasons to rejoice of late, with the economy on its knees and the country under international sanctions. The arrival of superstar footballer Cristiano Ronaldo, whose Saudi club plays in Tehran this evening, has provided moments of excitement and humour, though his visit has not been with universal acceptance.

Additional contributions from Tee Zhuo and Benjamin Wilhelm