(Bloomberg) — The Federal Reserve held the line on interest rates while the European Central Bank pushed on, and both of the central banking heavyweights signaled a likelihood of further hikes.
Central bank officials in advanced economies are approaching the final stages in their onslaught against the global inflation shock. While recent US and European price data have shown cost pressures are abating, inflation is proving sticky.
In China, officials are reducing rates to help stimulate a weak economy that includes a slump in real estate, a drop in business investment and record-high youth unemployment.
Here are some of the charts that appeared on Bloomberg this week on the latest developments in the global economy:
US
Fed officials paused following 15 months of interest-rate hikes but signaled they would likely resume tightening to cool inflation, projecting more increases than economists and investors expected. Fresh quarterly Fed forecasts showed borrowing costs rising to 5.6% by year end, according to the median projection. That’s higher than the 5.1% in the previous round of projections.
Both the consumer price index and the core CPI — which excludes food and energy — decelerated on an annual basis, highlighting inflation’s descent since peaking last year.
Europe
The ECB lifted interest rates by another quarter-point, with President Christine Lagarde describing a further hike in July as “very likely.” The deposit rate was raised to 3.5% on Thursday — the highest level in more than two decades. Fresh quarterly projections from the ECB suggested inflation will moderate more slowly than previously envisaged. Economic expansion in the 20-nation euro zone is seen a little weaker following recent data revealing a mild winter recession.
British wages shot up and unemployment fell unexpectedly in April, the latest signs that the resilient UK economy continues to defy efforts to cool demand and dampen inflationary pressures.
The Dutch government is set to permanently shut down the Groningen gas field in October, a move that may limit Europe’s supply buffer as it heads into the next winter. The site has caused huge local opposition after hundreds of earthquakes with magnitudes of up to 3.6 damaged thousands of homes. The government previously said it aims to shut the field at the latest by Oct. 2024 depending on the “geopolitical situation.”
A shift in Britain’s mortgage market is delaying the impact of higher interest rates on the economy, increasing the risk of the Bank of England fumbling its decision on how much more it needs to do to curtail inflation.
Asia
China’s weakening economy prompted the central bank to cut interest rates for the first time since August, and expectations are growing for more stimulus targeted at ailing industries including the property sector. Official data showed a slump in real estate, a worrying decline in business investment and record joblessness among young people.
Japan’s exports expanded at the weakest pace in over two years amid a global economic slowdown, adding to uncertainty over the country’s growth outlook. The value of exports rose 0.6% from a year earlier in May, the slowest pace since February 2021.
China’s indebted local governments are increasingly imposing controversial fines on residents in a bid to generate revenue, stoking anger among social-media users. Guangxi alone made 13 billion yuan ($1.8 billion) from fines last year, according to an analysis of government data by Caijing Industry Research Center — equivalent to about 14% of its tax income, rising from 9% in 2021.
New Zealand led the world in raising interest rates to combat the post-pandemic inflation wave. Now it’s officially in recession in a possible harbinger of what lies ahead for others. Gross domestic product fell 0.1% from the fourth quarter, when it dropped a revised 0.7%.
Emerging Markets
Just 30 miles (50 kilometers) offshore from Caracas lie the Western Hemisphere’s second-largest reserves of natural gas. Yet Venezuela has never exported a molecule of that fuel. Now, with the nation’s oil industry in tatters, President Nicolas Maduro is kicking off a long-shot bid to tap those vast deposits to revive an economy devastated by defaulted debt, rampant inflation and crippling US sanctions.
World
The Fed and ECB headlined this week’s central bank meetings. The Bank of Japan decided to stick with ultra-low rates, and Taiwan’s central bankers kept their key rate on hold for the first time since 2021.
–With assistance from Andrew Atkinson, Diederik Baazil, Matthew Brockett, Sophie Caronello, Rebecca Choong Wilkins, Lucille Liu, Yujing Liu, Yoshiaki Nohara, Reade Pickert, Jana Randow, Tom Rees, Garfield Reynolds, Zoe Schneeweiss, Alexander Weber, Lucy White, Erica Yokoyama, Xiao Zibang and Fabiola Zerpa.
TORONTO – Strength in the base metal and technology sectors helped Canada’s main stock index gain almost 100 points on Friday, while U.S. stock markets also climbed higher.
The S&P/TSX composite index closed up 93.51 points at 23,568.65.
In New York, the Dow Jones industrial average was up 297.01 points at 41,393.78. The S&P 500 index was up 30.26 points at 5,626.02, while the Nasdaq composite was up 114.30 points at 17,683.98.
The Canadian dollar traded for 73.61 cents US compared with 73.58 cents US on Thursday.
The October crude oil contract was down 32 cents at US$68.65 per barrel and the October natural gas contract was down five cents at US$2.31 per mmBTU.
The December gold contract was up US$30.10 at US$2,610.70 an ounce and the December copper contract was up four cents US$4.24 a pound.
This report by The Canadian Press was first published Sept. 13, 2024.
OTTAWA – Statistics Canada says wholesale sales, excluding petroleum, petroleum products, and other hydrocarbons and excluding oilseed and grain, rose 0.4 per cent to $82.7 billion in July.
The increase came as sales in the miscellaneous subsector gained three per cent to reach $10.5 billion in July, helped by strength in the agriculture supplies industry group, which rose 9.2 per cent.
The food, beverage and tobacco subsector added 1.7 per cent to total $15 billion in July.
The personal and household goods subsector fell 2.5 per cent to $12.1 billion.
In volume terms, overall wholesale sales rose 0.5 per cent in July.
Statistics Canada started including oilseed and grain as well as the petroleum and petroleum products subsector as part of wholesale trade last year, but is excluding the data from monthly analysis until there is enough historical data.
This report by The Canadian Press was first published Sept. 13, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in the base metal and energy sectors, while U.S. stock markets were mixed.
The S&P/TSX composite index was up 172.18 points at 23,383.35.
In New York, the Dow Jones industrial average was down 34.99 points at 40,826.72. The S&P 500 index was up 10.56 points at 5,564.69, while the Nasdaq composite was up 74.84 points at 17,470.37.
The Canadian dollar traded for 73.55 cents US compared with 73.59 cents US on Wednesday.
The October crude oil contract was up $2.00 at US$69.31 per barrel and the October natural gas contract was up five cents at US$2.32 per mmBTU.
The December gold contract was up US$40.00 at US$2,582.40 an ounce and the December copper contract was up six cents at US$4.20 a pound.
This report by The Canadian Press was first published Sept. 12, 2024.
