(Bloomberg) – Latest U.S. data showing sustained inflation so far this year and limited signs of weakening in the job market suggest the Federal Reserve is in no hurry to start cutting interest rates. It is supported.
Industrial production statistics show that the euro area economy is only limping along. In Japan, expectations for an interest rate hike for the first time in more than a decade intensified after the country’s largest labor union secured a major wage agreement.
The world of geopolitics continued to evolve, with Ukrainian drone attacks on Russian refineries, declining foreign investment in China, and U.S. concerns about Beijing’s subsidies to shipbuilders.
Below are some of the charts published this week in Bloomberg on the latest developments in the global economy, geopolitics and markets.
world
A Ukrainian drone attack shut down three oil refineries deep in Russian territory. President Vladimir Putin said the aim was to disrupt presidential elections later this week. Wednesday’s airstrike caused a fire at Rosneft PJSC’s Ryazan plant, one of the country’s largest crude oil processing facilities, near Moscow. Since the beginning of this year, Ukraine has been attacking important Russian oil facilities from the Black Sea to the Baltic Sea with drones.
US President Joe Biden has called on labor unions to urge his administration to review subsidies for Chinese shipbuilders, amid heightened trade and key supply chain tensions between the world’s two largest economies in a critical US presidential election year. It promised to consider the group’s petition. Shipbuilding has emerged as the latest battleground in the US-China trade war.
Georgia and Ukraine cut interest rates, while Angola raised rates. After leaving interest rates on hold last week, the European Central Bank has laid out a new framework for how monetary policy will be conducted, preserving the current rate-manipulation system but giving lenders more say over how much cash they need to operate. .
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The latest data on inflation and jobless claims gave Fed officials more reason to hold off on cutting interest rates, even as retail sales suggest a slowdown in consumer spending. Key elements of the latest Consumer Prices and Producer Prices Report, which informs the Federal Reserve’s preferred inflation measure, the Personal Consumption Expenditure Price Index, suggest that February PCE, due later this month, will be solid again. ing.
The Biden administration is proposing a $2.26 billion loan to help Lithium Americas develop the nation’s largest lithium deposit in Nevada. Demand for lithium, which is also used for power grid storage and weapons, is expected to exceed current production by 2030. About 65% of important minerals are processed in China.
Europe
Industrial production in the euro zone slumped at the start of the year, raising expectations that the broader economy would struggle to grow in the first quarter.
The UK economy recovered in January, posting moderate growth after falling into a technical recession in the second half of last year. Gross domestic product rose 0.2%, supported by services and construction, after falling 0.1% in December.
Asia
Japan’s biggest trade union group announced a stronger-than-expected annual wage deal, adding to already intense speculation that the central bank will raise interest rates next week for the first time since 2007. . Central banks have long pursued the goal of achieving sustainability goals. 2% inflation. A key element of that goal is to create a virtuous cycle in which wage growth leads to demand-driven price increases.
India’s inflation rate was little changed in February, remaining above the central bank’s target and giving policymakers reason to remain cautious. India’s strong economic growth last quarter is another reason for policymakers to remain cautious.
South Korean direct investment flows to China last year fell by the most in more than 30 years of data, a sign of weakening economic ties between the two countries. South Korea’s redirection of investment from China comes amid a change in the composition of its export market. China is about to overtake the United States as South Korea’s largest export destination.
Manila’s special envoy to Washington says the Philippines expects the United States and its allies to play a key role in its plans to explore energy resources in the disputed South China Sea. The Philippines is exploring several options to exploit the resource-rich South China Sea, almost all of which is claimed by China.It is estimated that this body of water contains large amounts of oil and gas
emerging market
President Luiz Inacio Lula da Silva’s plan to help Brazilians escape record amounts of debt accumulated during the pandemic remains well short of target as March 31 deadline approaches The move would undermine the president’s efforts to free up consumer spending and boost growth in Latin America’s largest economy. .
Argentina’s monthly inflation rate slowed for the second year in a row as the effects of December’s deep peso devaluation faded and President Javier Millei’s austerity measures pushed the economy into recession. On the eve of the policy decision, the central bank announced a surprise cut in interest rates from 100% to 80%, as policymakers said they expected monthly inflation to slow.
–Philip Aldrick, Andrew Atkinson, Jan Bratanich, Andreo Calonzo, Sam Kim, James Major, Ali Nutter, Yoshiaki Nohara, Anup Roy, Augusta Saraiva, Zoe Schneeweiss, Manolo Serapio Xiao and Erika Yokoyama with assistance from Junior, Manuela Tobias, Sylvia Westall, and Josh.
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