As inflation keeps rising, so too will interest rates. Here is a summary of recent hikes. BANK OF ENGLAND BOOSTS INTEREST RATES AGAIN On 5 May, the Bank of England (BoE) raised its key interest rate for the fourth time in as many meetings, boosting it from 0.75 to 1 percent as inflation raced at...
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MAERSK REPORTS RECORD PROFITS, WARNS OF SLOWING ECONOMY
AP Moller-Maersk, the world’s most profitable shipping line, became even more profitable in this year’s first quarter, booking $19.3 billion in revenue for the period, up 55 percent from 2022’s first three months. The company netted $6.8 billion in profits, more than double the previous quarter’s. However, “we are assuming a slowdown in the second...
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EU MULLS BAN ON RUSSIAN OIL. WILL IT MATTER?
The European Commission has proposed banning all imports of Russian oil by the end of this year, the Financial Times reported. To be enacted, the measure would require all 27 member countries to agree. However, Viktor Orban, Hungary’s autocratic prime minister, has so far opposed any bans on Russian fuels. Also, as a deterrent or...
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TOP 2022 TREND, DRAGFLATION: EUROZONE BORROWING COSTS SPIKE
Interest rates in the 19-nation Eurozone are surging as the European Central Bank (ECB) is halting its multi-year bond-buying program in advance of raising interest rates for the first time in eight years. On 4 May, the yield on Germany’s 10-year government bond—a benchmark for Eurozone rates—topped 1 percent for the first time since 2015....
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TOP 2022 TREND, DRAGFLATION: FRENCH AND GERMAN FACTORY OUTPUT SAGS IN MARCH
The number of new orders placed with German factories declined 4.7 percent in March, according to state agency Destatis, far below the 1.1-percent dip that analysts had expected. Orders from within Germany dropped 6.7 percent. Orders from outside the Eurozone plummeted 13.7 percent. German automakers, the foundation of the country’s industry, lost production due to...
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TOP 2022 TREND, DRAGFLATION: EUROZONE RETAIL SALES TANK
Retail sales across the 19 countries using the euro currency slipped 0.4 percent in March, three times more than the 0.1 percent expected by economists Reuters had surveyed. Sales dropped 4 percent in Spain; France and Germany also saw sharp declines. People bought more food, drinks, and tobacco, but less non-food consumer products, motor fuel,...
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RUSSIA EXPERIENCING MASSIVE TECH “BRAIN DRAIN”
As many as 70,000 skilled tech workers have left Russia since the Ukraine war began, with another 100,000 expected to emigrate by June, the Russian Association for Electronic Communications told the country’s parliament last month. Ok Russians, a nonprofit group helping people leave the country, estimates that almost 300,000 Russians have left since the war...
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U.S. TRADE DEFICIT SETS ANOTHER RECORD
The U.S. trade gap grew to $109.8 billion in March, a 22.8-percent jump from February, as Americans grabbed more cars, clothing, and computers and industry bought more supplies, the U.S. commerce department reported. Before the COVID virus arrived, the monthly deficit typically ranged between $40 billion and $50 billion, The Wall Street Journal noted. Imports...
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VALUE OF CORPORATE BONDS RANKED AS “JUNK” DOUBLES IN 2022
The value of U.S. corporate junk bonds, those trading for 70 cents on the dollar or less, has almost doubled this year, reaching $27 billion at the end of April, compared to $14 billion at the end of last year. Another closely-watched signal of trouble is if yields on a company’s bonds rise 10 points...
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RECESSION COMING? FORMER FED VICE-CHAIR SAYS YES
The U.S. Federal Reserve’s attempts to quell inflation will not be adequate to spare the economy from a recession, Randal Quarles, the Fed’s former vice chair for supervision, said. “Given the intensity of inflation, the degree to which unemployment has been driven down—to bring that back into an equilibrium, it’s unlikely the Fed is going...