Macro Snapshot — US weekly jobless claims fall; Italy business and consumers morale rise

The US Commerce Department confirmed the economy contracted in the first quarter under the weight of a record trade deficit and a slightly slower pace of inventory accumulation compared to the fourth quarter.
The US Commerce Department confirmed the economy contracted in the first quarter under the weight of a record trade deficit and a slightly slower pace of inventory accumulation compared to the fourth quarter.
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Updated 26 May 2022

Macro Snapshot — US weekly jobless claims fall; Italy business and consumers morale rise

Macro Snapshot — US weekly jobless claims fall; Italy business and consumers morale rise

RIYADH:  The number of Americans filing new claims for unemployment benefits fell last week, consistent with a labor market that remains tight amid strong demand for workers despite rising interest rates and tightening financial conditions.

Initial claims for state unemployment benefits decreased 8,000 to a seasonally adjusted 210,000 for the week ended May 21, the Labor Department said on Thursday. The decline partially unwound some of the prior week’s surge, which had pushed claims to their highest level since January.

Economists polled by Reuters had forecast 215,000 applications for the latest week. Some blamed the recent increase in applications to less generous seasonal factors in May, the model that the government uses to strip out seasonal fluctuations from the data, relative to the prior two months.

Others, however, believed some retailers were laying off workers. Several retailers, including Walmart Inc., last week cut their full-year earnings forecasts, warning that inflation was squeezing profits.

In a separate report on Thursday, the Commerce Department confirmed the economy contracted in the first quarter under the weight of a record trade deficit and a slightly slower pace of inventory accumulation compared to the fourth quarter.

Gross domestic product fell at a 1.5 annualized rate last quarter, the government said in its second GDP estimate. That was revised down from the 1.4 percent pace of decline reported in April. The economy grew at a robust 6.9 percent pace in the fourth quarter.

Italy business morale rise 

Morale among Italian businesses and consumers rose in May, data showed on Thursday, with service industries regaining confidence despite the ongoing war in Ukraine while manufacturers remained downbeat.

National statistics institute ISTAT’s manufacturing confidence index fell to 109.3 in May from 109.9 in April, but still came in slightly above a median forecast of 109.0 in a Reuters survey of 10 analysts.

ISTAT’s composite business morale index, combining surveys of the manufacturing, retail, construction and services sectors, rose to 110.9, compared with April’s reading of 108.4.

More positive sentiment in the services and retail sectors outweighed a decline in manufacturing and construction.

ISTAT said it had revised it methodology for calculating overall business sentiment, leading to a marked revision of its previous readings for April and preceding months.

Consumer confidence rose in May to 102.7 from 100 in April, the first increase after four consecutive declines. The reading comfortably beat a median forecast of 100.5 in Reuters’ poll.

Australia business investment dips 

Australian business investment fell unexpectedly in the first quarter as floods and bottlenecks hit building work, though firms sharply lifted plans for spending in the year ahead in a boost to the economic outlook.

Data from the Australian Bureau of Statistics out on Thursday showed private capital spending dipped a real 0.9 percent in the March quarter, from the previous quarter, missing forecasts of a 1.5 percent increase.

Spending on buildings fell 1.7 percent, offsetting a 1.2 percent rise in investment in plant and machinery which is important as this will directly contribute to economic growth in the quarter.

Promisingly, firms upgraded spending plans for the year to June 2023 to a strong A$130.5 billion ($92.49 billion), up almost 12 percent on the previous estimate and above the A$122 billion analysts had looked for.

The report echoes data showing construction work done fell 0.9 percent in the first quarter as bad weather and supply shortages dragged on activity, particularly in housing where building costs rose at the fastest pace in 21 years.

Bank of Canada to hike overnight rate 

The Bank of Canada will hike its overnight rate by 50 basis points on June 1, according to all 30 economists polled by Reuters, who see interest rates at least a half-point higher by year-end than predicted just one month ago.

The BoC seems set to follow an aggressive path similar to that taken by the Federal Reserve to tame soaring inflation, which hit over a three-decade high of 6.8 percent in April and has now been above the central bank’s 1-3 percent range for more than a year.

After a 50 basis-point hike in April, its biggest single increase in 22 years, BoC Gov. Tiff Macklem said interest rates may need to go above the neutral range — currently estimated to be between 2 percent and 3 percent — for a period of time to get inflation back to target. 

South Korea steps up inflation fight 

South Korea’s central bank on Thursday delivered back-to-back interest rate hikes and forecast further aggressive increases to wrestle consumer inflation down from 13-year highs.

The Bank of Korea raised its benchmark policy rate  by a quarter of a percentage point to 1.75 percent, the highest since mid-2019, joining a global wave of tightenings as central bankers grapple with price spikes not seen in decades.

Russian central bank slashes key rate

Russia’s central bank slashed its key interest rate to 11 percent on Thursday and said it saw room for more cuts this year, as inflation slows from more than 20-year highs and the economy heads toward a contraction.

It announced the move, which followed two previous 300 basis point cuts which took the rate to 14 percent, at an extraordinary meeting. The bank has been gradually reversing an emergency rate hike to 20 percent in late February that was triggered by Russia’s Feb. 24 move to send tens of thousands of troops into Ukraine and the imposition of Western sanctions in response.

 

(With input from Reuters) 


Crypto Moves — Bitcoin, Ether down: Kuwait-based Islamic bank enters the metaverse

Crypto Moves — Bitcoin, Ether down: Kuwait-based Islamic bank enters the metaverse
Updated 11 sec ago

Crypto Moves — Bitcoin, Ether down: Kuwait-based Islamic bank enters the metaverse

Crypto Moves — Bitcoin, Ether down: Kuwait-based Islamic bank enters the metaverse

RIYADH: Bitcoin, the leading cryptocurrency internationally, traded lower on Monday, falling by 0.01 percent to $19,106 as of 10:55 p.m. Riyadh time. 

Ether, the second most traded cryptocurrency, was priced at $1,049 down by 1.20 percent, according to data from CoinDesk.

Kuwait-based Islamic bank enters the metaverse

Warba Bank, a Kuwait-based Islamic bank, has become the latest corporation from the Middle East and North Africa region to enter the Metaverse, a network of 3D virtual worlds focused on social connection. 

The bank now occupies two sites in the metaverse, one on Decentraland and another on Sandbox.

The bank's presence in the metaverse is expected to enhance its communication with the younger generation, according to Bitcoin.com. 

“Warba Bank’s interest in entering this virtual reality comes within the framework of digital trends to transform into a Web3. The world of virtual reality is used in several advanced fields, including services, education, health and others,” Anwar Al-Ghaith, the financial institution’s VP for Support Services and Treasury said. 

He added: “Warba Bank aims to be close to its clients in virtual reality to introduce its products and services, as well as communicating with them in an innovative way that reflects Warba Bank’s image as a pioneer in digital transformation.”

According to a statement issued by the bank, it is now working to achieve its ambitious goals and enhance the advantages of digital services.

It will also focus on absorbing emerging technologies and artificial intelligence.


Commodities Update — Gold inches up; Copper hovers near 17-month low

Commodities Update — Gold inches up; Copper hovers near 17-month low
Updated 28 min 38 sec ago

Commodities Update — Gold inches up; Copper hovers near 17-month low

Commodities Update — Gold inches up; Copper hovers near 17-month low

RIYADH: Gold inched higher on Monday, as weakness in Treasury yields kept prices above the $1,800-mark and marginally outweighed pressure stemming from elevated US dollar levels.

Spot gold was up 0.1 percent at $1,811.99 per ounce, by 0319 GMT. 

US gold futures rose 0.6 percent to $1,812.10.

Silver eases

Spot silver eased 0.2 percent to $19.84 per ounce, while platinum fell 0.5 percent to $884.49. 

Palladium dropped 1.3 percent to $1,934.40.

Copper languishes near 17-month low amid slowdown fears 

Copper prices slipped on Monday to hover near a 17-month low as renewed lockdowns in top consumer China and the prospect of aggressive rate hikes stoked fears of global economic slowdown, denting demand for metals.

Three-month copper on the London Metal Exchange was down 0.3 percent at $8,027.50 a ton, as of 0404 GMT.

The most-traded August copper contract in Shanghai fell 2.1 percent to $9,153.68 a ton by the midday break.

Russian ship carrying Ukrainian grain detained by Turkey

Turkish customs authorities have detained a Russian cargo ship carrying grain which Ukraine says is stolen, Ukraine’s ambassador to Turkey said on Sunday.

Ukraine had previously asked Turkey to detain the Russian-flagged Zhibek Zholy cargo ship, according to an official and documents viewed by Reuters.

Reuters reporters saw the Zhibek Zholy ship anchored about 1 km from shore and outside of the Karasu port on Sunday, with no obvious signs of movement aboard or by other vessels nearby.

“We have full co-operation. The ship is currently standing at the entrance to the port, it has been detained by the customs authorities of Turkey,” Ambassador Vasyl Bodnar said on Ukrainian national television.

Bodnar said the ship’s fate would be decided by a meeting of investigators on Monday and that Ukraine was hoping for the confiscation of the grain.


TASI begins higher despite market fears: Opening bell

TASI begins higher despite market fears: Opening bell
Updated 04 July 2022

TASI begins higher despite market fears: Opening bell

TASI begins higher despite market fears: Opening bell

RIYADH: Saudi stocks opened higher in the early morning trading session, despite ongoing market fears of higher interest rates weighing on investors' sentiment.

The main index, TASI, gained 0.11 percent to reach 11,477, while the parallel market, Nomu, started flat at 21,082, as of 10:08 a.m. Saudi time.

This was led by a rise in the banking sector, with Al Rajhi, the Kingdom’s largest valued bank, adding 0.25 percent, and Saudi National Bank adding 0.75 percent.

Among the biggest IT companies, Elm Co. gained 0.48 percent and Al Moammar Information Systems Co. gained 0.12 percent, respectively.

Shares of Saudi Aramco, the largest player on the Saudi oil market, opened 0.52 percent lower.

Fawaz Abdulaziz Alhokair Co. led the fallers with a 3.07 percent decline, followed by Abdulmohsen Alhokair Group for Tourism and Development which fell 2.48 percent.

In the energy sector, West Texas Intermediate crude was trading at $108.56 per barrel and Brent crude was trading at $111.74 per barrel as of 10:10 a.m. Saudi time.


SABB to pay $301m in dividends for H1

SABB to pay $301m in dividends for H1
Updated 04 July 2022

SABB to pay $301m in dividends for H1

SABB to pay $301m in dividends for H1

RIYADH: Saudi British Bank, also known as SABB, has proposed a dividend of SR1.13 billion ($301 million) for the first half of 2022.

The dividend payout per share has been set at SR0.55 for over 2 billion shares eligible for dividends which will be distributed on July 27, according to a bourse filing.

SABB, which was voted the best bank in 2022, recently appointed Yasser Ali Al-Barrak as its new CEO for corporate and institutional banking.

The bank has posted a 3 percent increase in net profit to SR1 billion in the first quarter of 2022, over SR974 in the year-ago quarter.


Here’s what you need to know before Tadawul trading on Monday

Here’s what you need to know before Tadawul trading on Monday
Updated 04 July 2022

Here’s what you need to know before Tadawul trading on Monday

Here’s what you need to know before Tadawul trading on Monday

RIYADH: Saudi stocks ended their first trading session of July in red, extending losses after an 11-percent decline in June due to fears over inflation and recession.

TASI, the main benchmark index, fell 0.5 percent to 11,464 on Sunday and the parallel market, Nomu, shed 2.3 percent to 21,082.

Oman’s stock exchange declined 0.3 percent in line with Saudi Arabia.

However, the Bahraini bourse led the gains in the region as it advanced by 1.4 percent, followed by Kuwait and Qatar, up 1 and 0.7 percent, respectively.

Outside the Gulf, Egypt’s blue-chip index EGX30 lost as much as 2.4 percent.

In the oil market, Brent crude futures rose slightly to $112.16 a barrel and US West Texas Intermediate reached $108.82 a barrel by 8:59 a.m. Saudi time on Monday.

Stock news

The Saudi British Bank, or SABB, appointed Yasser Ali Al-Barrak as its new CEO for corporate and institutional banking

SABB’s board of directors proposed a dividend distribution of SR1.13 billion ($301 million) in total, or SR0.55 per share, for the first half of 2022

Al-Khaleej Training and Education Co. entered into a non-binding agreement to potentially acquire 51 percent of Al-Minhaj Private Schools Co.

Ayyan Investment Co. named Faisal Al-Qahtani chairman of the board and Abdul Aziz Al Shaikh vice-chairman

Wafrah for Industry and Development Co.’s rights issue was 78 percent subscribed, generating SR120 million in proceeds

Jahez International Co. for Information System Technology appointed Lulua Bakr to replace audit committee chairman Abdulwahab Al-Butairi following his resignation

Saudi Basic Industries Corp.'s health insurance contract with Bupa Arabia was renewed for one year starting July 4

Calendar

July 4, 2022

Launch of single-stock futures trading on Tadawul

July 7, 2022

Saudi Exchange will close for the Eid Al Adha holidays and resume trading on July 13