S. Korea’s March inflation hits decade high; US trade deficit holds at record high in February — Macro Snapshot

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Updated 05 April 2022

S. Korea’s March inflation hits decade high; US trade deficit holds at record high in February — Macro Snapshot

S. Korea’s March inflation hits decade high; US trade deficit holds at record high in February — Macro Snapshot

RIYADH: South Korea’s consumer prices rose at their fastest pace in more than a decade in March as the Ukraine war fueled surging energy and commodity costs, adding pressure to the central bank ahead of its rate decision meeting next week.

The consumer price index for March rose 4.1 percent from a year earlier, official data showed on Tuesday, the fastest increase since December 2011 and outpacing a 3.8 percent rise tipped in a Reuters poll. 

Core inflation, which excludes volatile food and energy costs, also jumped 2.9 percent from a year earlier, staying at the rate seen in February. The sustained rise in core prices shows surging fuel and raw materials costs are feeding through to consumers.

Japan’s household spending

Japan’s household spending rose for a second consecutive month year-on-year in February, helped by a flattering comparison with last year’s sharp pandemic-induced slump but the consumer sector is now facing growing headwinds from soaring prices.

Households cut spending from the previous month as pandemic curbs, rapid food and fuel price rises and the coronavirus kept wallets shut, casting a shadow over the world’s third-largest economy.

In a sign of trouble for consumer sentiment, real wage growth stagnated in February as global inflationary pressures weighed on household purchasing power.

“Prices will outpace wage gains from now on, so consumption will be on a sluggish trend,” said Takeshi Minami, chief economist at Norinchukin Research Institute.

Romania lifts interest rate 

Romania’s central bank lifted its benchmark interest rate by half a percentage point to 3 percent on Tuesday and said inflation would rise more than expected as fuel and food prices would outpace a government energy support scheme.

The bank raised its lending facility rate to 4 percent from 3.50 percent and its deposit rate to 2 percent from 1.5 percent, and said it would retain firm control over market liquidity.

All analysts polled by Reuters had expected Tuesday’s hike, with a median forecast for the benchmark rate at end-2022 at 4 percent.

Australia’s hike interest rate

Australia’s central bank on Tuesday opened the door to the first interest rate increase in more than a decade as it dropped a previous pledge to be “patient” on policy, a major surprise that sent the local dollar to nine-month highs.

Wrapping up its April policy meeting, the Reserve Bank of Australia kept its cash rate at 0.1 percent but noted inflation had picked up and was likely to rise further, while unemployment had fallen faster than expected to 4.0 percent.

“Over coming months, important additional evidence will be available to the Board on both inflation and the evolution of labor costs,” said RBA Gov. Philip Lowe in a statement.

Italy’s service sector 

Growth in Italy’s service sector slowed in March as the war in Ukraine weighed on demand, a survey showed on Tuesday, the latest sign of weakening momentum in the eurozone’s third-largest economy.

S&P Global’s Purchasing Managers’ Index Index for services fell to 52.1 in March from 52.8 in February, while remaining above the 50 mark that separates growth from contraction.

The reading beat the median forecast of 51.5 in a Reuters survey of 14 analysts.

The sub-index for new business in the service sector came in at 52.6 in March compared with 52.9 in February.

Growth in France

France’s services sector grew at a faster rate in March, a survey showed on Tuesday, although businesses’ confidence over the outlook weakened due to inflation and uncertainty caused by Russia’s invasion of Ukraine.

S&P Global said that while French business activity had benefited from the removal of COVID-19 health protocols in the country, its measure of business confidence had fallen to a 14-month low in March.

S&P Global said its purchasing managers index for services rose to 57.4 points in March from 55.5 in February — exactly in line with an earlier flash estimate.

Canada’s exports 

Canada’s exports rose 2.8 percent in February to a record high, driven mostly by energy products, while imports climbed 3.9 percent from the previous month, led by metals, data from Statistics Canada showed on Tuesday.

The country’s trade surplus with the world narrowed to C$2.66 billion ($2.14 billion), slightly below analyst forecasts of C$2.9 billion. But exports came in above expectations at C$58.75 billion, with imports also beating at C$56.08 billion.

Energy exports rose 7.8 percent to a record high, making up more than two-thirds of the total increase, while exports of non-energy products were up 1.2 percent. In volume terms, exports were up 0.6 percent.

US trade deficit 

The US trade deficit barely budged from a record high in February, suggesting that trade remained a drag on economic growth in the first quarter.

The Commerce Department said on Tuesday that the trade deficit dipped 0.1 percent to $89.2 billion in February. Data for December was revised to show a $89.2 billion shortfall, still an all-time high, instead of the previously reported $89.7 billion.

Economists polled by Reuters had forecast a $88.5 billion deficit. Trade has subtracted from gross domestic product growth for six straight quarters.

Saudi Arabia, Uzbekistan sign agreement in the energy field

Saudi Arabia, Uzbekistan sign agreement in the energy field
Updated 13 sec ago

Saudi Arabia, Uzbekistan sign agreement in the energy field

Saudi Arabia, Uzbekistan sign agreement in the energy field

JEDDAH: Saudi Arabia’s Ministry of Energy signed a memorandum of understanding with its Uzbek counterpart on August 18, to develop cooperation and exchange information and experiences between both countries, in the energy field, Saudi Press Agency reported.

This comes on the second day of the Saudi-Uzbek Business Council in Jeddah, that was held on the sidelines of the visit of the Uzbek President Shavkat Mirziyoyev to the Kingdom.

This deal covers the areas of petroleum, gas, electricity, renewable energy, energy efficiency, petrochemicals, and hydrogen.

It also includes the circular carbon economy and its technologies with the aim of limiting the effects of climate change, such as carbon capture, reuse, transport and storage.

Saudi Arabia and Uzbekistan have already signed over 10 investment agreements, worth over SR45 billion ($12 billion), on Wednesday, covering different sectors.

IsDB, Uzbekistan strengthen cooperation

IsDB, Uzbekistan strengthen cooperation
Updated 11 min 56 sec ago

IsDB, Uzbekistan strengthen cooperation

IsDB, Uzbekistan strengthen cooperation

JEDDAH: Islamic Development Bank President Mohammed Al-Jasser met with Uzbekistan President Shavkat Mirziyoyev on August 18 to discuss strengthening cooperation between both parties, Saudi Press Agency reported.

A letter of intent was signed during the meeting to provide a framework for facilitating cooperation, promoting rapid processing and approval of projects and operations that are part of the work program of the IsDB Group for Uzbekistan in 2022.

The meeting comes on the second day of the Uzbek President's visit to the Kingdom.

Mirziyoyev stressed that his government has implemented comprehensive reforms with the aim of improving the business and investment environment, enhancing regional cooperation, improving the agricultural sector, and promoting innovation and entrepreneurship to reach the goal of achieving dignity for all people by 2026.

Both parties reviewed views on the National Development Strategy of Uzbekistan 2026, and agreed on the need to align the bank's country strategy with the national document, a task that will be worked on as a priority, according to Al-Jasser.

The two sides also emphasized the need to facilitate the joining of more co-financiers to participate in financing larger projects.

Standard Chartered appoints Ayesha Abbas UAE Head of Consumer, Private and Business Banking 

Standard Chartered appoints Ayesha Abbas UAE Head of Consumer, Private and Business Banking 
Updated 49 min 55 sec ago

Standard Chartered appoints Ayesha Abbas UAE Head of Consumer, Private and Business Banking 

Standard Chartered appoints Ayesha Abbas UAE Head of Consumer, Private and Business Banking 

RIYADH: Standard Chartered Bank appointed on Friday Ayesha Abbas as Head of Consumer, Private and Business Banking in the UAE. 

Abbas will be responsible for executing the bank’s strategy and building the business in the retail banking business across the UAE, a statement showed.

She will also focus on growing the Bank’s digital offering, wealth management and affluent proposition in addition to strengthening client relationships. 

Abbas has over two decades of experience spanning wealth management, priority and consumer banking. 

She joined Standard Chartered in February 2019 serving as General Manager, Head of Priority and Premium Banking and Branch Network in the UAE, also covering Pakistan, Oman and key African markets. 

Prior to joining Standard Chartered, Abbas spent 18 years at HSBC, the statement said.

Oil dips as slowdown worries limit price gains

Oil dips as slowdown worries limit price gains
Updated 19 August 2022

Oil dips as slowdown worries limit price gains

Oil dips as slowdown worries limit price gains
  • US crude stocks fall by 7.1 mln bbl, far more than expected
  • US oil refiners aim to run full-bore, spurning recession fears
  • OPEC chief says blame policymakers, lawmakers for price rises (Recasts, updates prices)

SINGAPORE: Oil prices dipped on Friday after two days of gain, as market participants weighed worries about global economic slowdown — that could dampen fuel demand — against expectations of tighter supplies toward year-end.

Brent crude futures fell 36 cents, or 0.4 percent, to $96.23 a barrel by 0309 GMT after settling 3.1 percent higher on Thursday. US West Texas Intermediate crude was at $90.29 a barrel, down 21 cents, or 0.2 percent, following a 2.7 percent increase in the previous session.

Still, the benchmark contracts were headed for weekly losses of about 1.5 percent.

While bullish US weekly data bolstered optimism for improved fuel demand for the near-term, lingering recession fears and a possible increase in output by OPEC+ will likely limit oil price’s upside, said Satoru Yoshida, a commodity analyst with Rakuten Securities.

US crude inventories fell sharply as the nation exported a record 5 million barrels of oil a day in the most recent week, with oil companies finding heavy demand from European nations looking to replace crude from warring Russia.

Keeping crude supplies snug, US oil refineries plan to keep running near full throttle this quarter, according to executives and estimates, as refiners set aside worries about recession and sliding retail prices to deliver more fuel.

The rise in US fuel production could partly offset lower oil products exports from China this year as Beijing prioritizes the local market to curb domestic fuel inflation.

On supplies, Haitham Al Ghais, new secretary general of the Organization of the Petroleum Exporting Countries, told Reuters that policymakers, lawmakers and insufficient oil and gas sector investments are to blame for high energy prices, not his group.

The group together with allies such as Russia, known as OPEC+, are due to meet on Sept. 5 to adjust production. OPEC is keen to ensure Russia remains part of the OPEC+ oil production deal after 2022, Al Ghais said.

In a sign of improving supplies, the price gap between prompt and second-month Brent futures narrowed about $5 a barrel from the end of July.

Record US crude exports, the resumption of Libya’s production and sustained exports from Russia and Iran have eased global supply tightness ahead of peak refinery maintenance.

Russia forecasts rising output and exports until the end of 2025, an economy ministry document seen by Reuters showed, saying revenue from energy exports will rise 38 percent this year, partly due to higher oil export volumes.

Iran, meanwhile, increased its oil exports in June and July and could raise them further this month by offering a deeper discount to Russian crude for its main buyer China, firms tracking the flows said. 

UK’s Liz Truss says defining mission will be reviving the economy

UK’s Liz Truss says defining mission will be reviving the economy
Updated 19 August 2022

UK’s Liz Truss says defining mission will be reviving the economy

UK’s Liz Truss says defining mission will be reviving the economy

LONDON: The frontrunner to be Britain’s next prime minister Liz Truss said her government’s defining mission would be to revive the economy as she set out a series of measures to help parts of northern England.
Britain’s economic performance has lagged behind those of the United States, Italy and France in recovering from the COVID-19 pandemic. The economy is expected to enter a long downturn at the end of the year amid surging inflation and rising interest rates.
“The defining mission of my government will be to get our economy growing again, cutting taxes to put more money into the pockets of hardworking people,” Truss said.
Outgoing Prime Minister Boris Johnson had said reducing regional economic inequality was his main goal. But public spending in the north of England fell behind the national average in the first two years of his government, research by the Institute for Public Policy Research has shown.
Truss said she was committed to the current government’s goal of reducing economic inequalities but would do so in a “Conservative way,” interpreted as meaning a focus on tax cuts and deregulation.
Speaking ahead of election hustings in Manchester in northern England on Friday, Truss pledged to provide more devolution, to ensure poorer areas receive the government funding they need, and to build two new vocational colleges in the north of England that will be “the vocational equivalent of Oxford and Cambridge,” dubbed “Voxbridge.”
Truss has portrayed herself as a radical insurgent who would overturn the current failed orthodoxy and has proposed to reverse more than £30 billion ($36 billion) of tax rises.