MONEY LIVE | China unexpectedly cuts key rates as economic data disappoints.
Britain's economy shrank in the second quarter, official data showed Friday, as the country heads towards recession under a new prime minister.
"Health was the biggest reason the economy contracted as both the test and trace and vaccine programmes were wound down, while many retailers also had a tough quarter." His trip coincided with Zahawi also being away on holiday, as the central bank hiked interest rates by the biggest margin in nearly three decades in a bid to stem surging inflation.
But Sunak said tax cuts financed with more borrowing would force the bank to increase interest rates even more, insisting on the need to maintain fiscal rigour and tame the price pressures first.Revenue at Chinese telecom giant Huawei dipped by more than six percent in the first half of 2022, company figures showed Friday, as the Covid-19 pandemic and US-China trade rivalry hit sales.
The Biden administration has added to the pressure on the firm with the recently passed US Chip Act, which could threaten its access to global semiconductor supply chains. Equities surged across the region Thursday after the closely watched US consumer prices index eased more than expected in July, boosting hopes the Federal Reserve could slow down its pace of monetary tightening.
She added she would likely support a half-point hike at next month's meeting, but was open to a third successive three-quarter-point lift if the data showed it was needed. The yield on 10-year US Treasury notes rose Thursday, reflecting expectations the Fed will press on with its sharp rate increases.And Asia also struggled to maintain momentum, with Hong Kong, Shanghai, Sydney, Seoul, Singapore, Manila, Jakarta and Wellington all slightly lower.
There was also a worry that because the drop in CPI and PPI was helped by a plunge in oil prices, they could easily spiral higher again if crude markets rallied. Mineral sales at current prices fell by 6%, with sales of PGMs down 31%, gold down 54% and iron ore also down 22.5%. But coal sales rocketed by 71%.
Data on Wednesday showed US consumer prices were unchanged in July, month on month, after advancing 1.3% in June. "While yesterday's data clearly reduces the risk of further aggressive Fed action and therefore helps curtail US dollar demand, we equally see it as unlikely that this data alone will prompt much further US dollar selling from here," currency analysts at MUFG said in a note.MTN profit up 47%, but warns of price hikes in some markets
The below-forecast reading on consumer prices came on the back of a sharp drop in energy costs and provided a much-needed boost to risk assets across the board. But while sentiment was positive, analysts warned against getting over-excited as inflation was still high and would take some time to get under control.
Minneapolis Fed boss Neel Kashkari warned"we are a long way away from saying that we're anywhere close to declaring victory", while Chicago bank boss Charles Evans added rates would continue to rise for"the rest of this year and into next year". And Christian Hoffmann, at Thornburg Investment Management, added:"We should not be surprised to see Fed speakers continue to try to talk down the market and risk assets."
The dollar weakened in reaction to the latest inflation data, which may limit US interest rate hikes in future. By late afternoon, the rand was almost 3% stronger at R16.19. This was as the global equity market experienced one of its worst years in recent history, thanks to the Russia-Ukraine war, rising global inflation and monetary policy tightening worldwide.
He said the traditional 60:40 multi-asset portfolios had their largest negative year-to-date return on record. In South Africa, construction and commissioning of the new 45% expanded Inyoni operations were completed in March 2022 with an annualised nameplate production capacity of 44 000 PGM ounces and a 1.2 million tons combined chrome concentrate capacity – an increase of 85%.
Investors are preparing for the consumer price figures with a sense of dread as analysts warn a forecast-beating reading would ramp up bets on another big Federal Reserve hike and reinforce recession expectations. "A strong inflation outcome today will likely reinforce the is still some way away from that point yet, and see markets readjust higher their expectations for US interest rates."
Tech firms led losses in New York, with the Nasdaq off more than one percent, and they did so in early Asian trade. The cost of the commodity has essentially wiped out all the gains seen since Russia's invasion of its neighbour in February as expectations of a recession hit demand forecasts, while consumers are put off buying petrol owing to rising prices.
"This will keep the dollar... in focus after a very strong US jobs report on Friday rekindled the possibility of a hat trick of 75-basis-point rate hikes in September." Both main oil contracts have lost all the gains seen in the wake of Russia's invasion of Ukraine, which led the United States and Europe to ban imports of Russian crude, hammering already thin supplies.
Iranian sources have suggested that one of the key sticking points is a probe by the IAEA into traces of nuclear material found at undeclared Iranian sites.Package maker Mpact has had a strong half-year performance, but has warned of possible price hikes in October as input costs continue to climb. The packaging manufacturer's paper business saw a 5.9% revenue jump to R4.9 billion in the interim period, while the revenue growth of its plastics business remained flat, with a 1.2% increase to R849 million.
Its share price remained flat in quiet trading on Monday morning. Mpact shares are down 22% from peaks reached in January this year.JSE-listed ICT group Datatec announced on Monday that its subsidiary Logicalis UK&I bought Q Associates, a UK IT consultancy. The company focuses on data management, data protection, compliance and information security. Its clients are UK universities, the UK government and commercial clients.
"Friday's payroll report indicates an overheated labour market that continues to tighten further," said SPI Asset Management's Stephen Innes. The jobs figures left Wall Street's main indexes mixed Friday, and Asia followed suit with markets fluctuating in early trade. A rise in US stockpiles was partly responsible for a 10 percent drop in the commodity last week, pushing WTI below $90 for the first time since February.
"I would like to thank my fellow board members and executive management for their support over the years," Kenney said.You cannot escape the fact that inflation in USA is at 40y highs and interest rates have shown a huge % increase on a low base. Earnings will fall over next year, but still the big pressure is on rating of the market. Inflation will fall materially next year and so will rates.
India bounced back strongly from the coronavirus pandemic with one of the world's fastest growth rates but is now grappling with rising costs as commodity prices remain elevated. He added that the Indian economy was"holding steady and progressing in an ocean of turbulence and uncertainty". Aggressive rate hikes by the US Federal Reserve have further exacerbated outflows, with foreign investors withdrawing a net $30 billion from debt and equity in the first half of 2022.
Production was 3% higher year-on-year, owed to marked improvements from the group's Australian and Latin American operations, which offset lower production from its Kibali and Geita mines in Africa. In the comparative period, basic earnings of R47 billion and earnings per share of R59.96 cents, benefited from the reversal of impairment losses on property, plant and equipment and the prepayment of royalties of R10.6 billion.
However, while markets have enjoyed a broadly positive week, optimism remains at a premium as traders fret over issues including the conflict in Eastern Europe, China's military drills around Taiwan and a possible global recession. Traders will now be closely watching the release of a crucial US jobs report later Friday for a fresh snapshot of the world's top economy.
In a sign of the long road ahead, the Bank of England hiked rates by the most since it was made independent in 1997, and warned inflation will likely go higher than 13 percent while Britain will suffer an extended recession.Tokyo, Shanghai, Sydney, Seoul, Jakarta, Wellington and Singapore rose, though Hong Kong and Manila dipped.
Geir Lode, of Federated Hermes, said:"For a world facing a whole raft of major challenges, there sure is a lot of optimism across equities right now. Most policymakers felt that a"more forceful policy action was justified" than in previous meetings to combat rampant inflation fuelled by rocketing domestic energy bills.
"As this feeds through to retail energy prices, it will exacerbate the fall in real incomes for UK households and further increase UK CPI inflation in the near term." The OPEC+ decision to raise production by 100,000 barrels per day for September is likely to disappoint US President Joe Biden, who travelled to Saudi Arabia last month to lobby for help to tame soaring energy prices. The increase is much smaller than other recent boosts by the exporter group.The CEO of Hulamin, Richard Jacob, will retire at the end of September, the company announced.
The result, Sasol said, was underpinned by a favourablemacroeconomic environment, with higher crude oil prices, refining margins andchemicals prices against a backdrop of heightened geopolitical tensions."This resulted in a strong gross margin Oil managed to clock up some gains following another sell-off that came on the back of fresh signs of weakening demand in the United States, which came as major producers announced an increase in output, albeit a small one.
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