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China’s services sector activity slows in Sept – official PMI

China’s services activity expanded at a slower pace in September, an official survey showed on Friday, as COVID-19 curbs in populous cities weighed on consumption. The official non-manufacturing purchasing managers’ index (PMI) dropped to 50.6 in September from 52.6 in August, data from the National Bureau of Statistics showed. A reading above the 50-point mark indicates expansion in activity while a reading below indicates contraction. China’s official composite PMI, which includes both manufacturing and services activity, stood at 50.9, compared with 51.7 in August. Source: Reuters

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Mester: Fed will watch growth concerns after clear progress on inflation

Fed officials at some point will begin balancing concerns about growth against their inflation goals, but not until inflation is clearly heading back towards its 2% target, Cleveland Fed President Loretta Mester said. “At this point price stability is still job one. We have to get that out of the way,” before worrying about the impact on economic growth, Mester said in comments at an inflation conference at the Cleveland Fed. “As inflation moves back down, then those decisions become judgments about when do you hold, how long do you ...

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U.S. Core PCE rise keeps aggressive Fed scenario in place

The personal consumption expenditures (PCE) price index rose 0.3% last month after dipping 0.1% in July, the U.S. Commerce Department reported on Friday. In the 12 months through August, the PCE price index increased 6.2% after advancing 6.4% in July. Excluding the volatile food and energy components, the PCE price index jumped 0.6% after being unchanged in July. The so-called core PCE price index climbed 4.9% on a year-on-year basis in August after increasing 4.7% in July. The Fed tracks the PCE price indexes for its 2% inflation target. Other ...

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Turkish trade deficit jumps 160% in August -stats institute

Turkey’s foreign trade deficit surged 159.9% year-on-year to $11.19 billion in August, with imports surging 40.4%, data from the Turkish Statistical Institute showed on Friday. Imports stood at $32.53 billion, while exports rose 13.1% to $21.34 billion, the data showed. Under an economic programme unveiled last year, Turkey aims to shift to a current account surplus through stronger exports and low interest rates, despite soaring inflation and a tumbling currency. Soaring global energy and commodity prices have made that target all but unattainable. The deficit in the first eight months ...

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Inflation falls in France but pressure is not moderating

A fall in inflation expected, but misleading As expected, consumer price growth slowed in September in France to 5.6% from 5.9% in August. The harmonised index, which is important for the European Central Bank, stood at 6.2%, also down from the previous month (6.6%). The fall in the inflation figure is almost entirely due to measures taken by the government to combat the erosion of purchasing power. On the one hand, the 30 cent per litre rebate on the price of fuel at the pump, combined with the maintenance of ...

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Weaker Global Demand Adds to External Risks for African Sovereigns

Deteriorating prospects for global demand in 2023 will add to external risks for many African sovereigns by dampening export prospects, says Fitch Ratings. Nonetheless, risks will vary across our rated portfolio. Fitch now expects global GDP to grow by just 1.7% in 2023, down from our previous forecast of 2.7% in June 2022. Growth in the US and eurozone will be close to 0%. Growth in China, at 4.5% in 2023, will be stronger than the 2.8% that we expect this year, but will still mark a relatively weak recovery. ...

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European Commission and the European Bank for Reconstruction and Development deepen their partnership to boost private sector investment in partner countries

Today, Commissioner for International Partnerships, Jutta Urpilainen, and Odile Renaud-Basso, President of the European Bank for Reconstruction and Development (EBRD), signed a new Financial Framework Partnership Agreement (FFPA) between the European Commission and the EBRD to boost investment in sustainable infrastructure and private sector development and to cooperate for example on issues such as nuclear safety. Commissioner Jutta Urpilainen said: “The EBRD is one of our key allies in rolling out the EU’s Global Gateway strategy – our €300 billion investment in digital, green, transport, health, and education infrastructures. Its ...

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China central bank makes biggest weekly net cash injection since Jan 2020

China’s central bank made the biggest weekly liquidity injection on a net basis through short-term bond instruments in more than 32 months, to counteract higher cash demand at the quarter-end. The People’s Bank of China (PBOC) injected 186 billion yuan ($26.13 billion) via open market operations on Friday, including 128 billion yuan in seven-day reverse repos and another 58 billion yuan through 14-day tenor. The move resulted in a net injection of 868 billion yuan of offerings for the week, booking the biggest weekly net fund injection since January 2020. ...

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Dollar shock threatens global economy

Rising interest rates and a rapidly appreciating currency are exporting the U.S. inflation problem and threaten to send the rest of the global economy into recession as other central banks are forced to raise their own rates. U.S. overnight interbank interest rates have risen by 300basis points over the last 12 months, the fastest increase since1989 and before that 1981. Traders anticipate the central bank will lift its target for the federal funds rate by another 150 basis by April 2023. Yields on benchmark 10-year U.S. Treasuries have climbedto 3.80%, ...

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One-way economy flights from Moscow to Dubai are nearly $5,000 as Russians flee mobilization call

One-way economy flights from Moscow to Dubai are going for as much as $5,000 and many have completely sold out in the days following Russian President Vladimir Putin’s declaration of a “partial” mobilization of 300,000 reservists to fight in Ukraine. The roughly five-hour flight cost around $350 one week before the announcement that was delivered on Sept. 21. Current prices on UAE airlines Emirates and FlyDubai for the month between Sept. 28 and Oct. 26 are going for between $2,577 and $4,773 for a one-way economy ticket, according to those ...

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German unemployment rises in September as Ukrainian refugees enter system

German unemployment rose in September, Labour Office figures showed on Friday, as Ukrainian refugees continue to enter the system. The Federal Labour Office said the number of people out of work rose by 14,000 in seasonally adjusted terms to 2.510 million, below expectations by analysts polled by Reuters. Without taking into account people with Ukrainian citizenship, the figures would have been significantly better, said the office. “The labour market remains stable overall despite rising prices and concerns about an energy shortage,” said labour office chief Andrea Nahles. The seasonally adjusted ...

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Japan’s data surprises on the upside

Industrial production recorded a third monthly gain in August Industrial production in August rose 2.7% month-on-month seasonally-adjusted (vs 0.8% in July), beating the market consensus of 0.2%. In three-month sequential terms, IP rebounded quite sharply by 4.6% from -2.7% in June, suggesting that quarterly manufacturing growth in GDP is highly likely to turn positive. Machinery (3.5%) and iron/steel (3.6%) were the main factors behind the strong monthly gain while automobiles (-4.0%) and petrochemicals (-2.4%) dropped. Electronic parts and devices, meanwhile, recorded a second monthly decline (-6.3%), which was also shown ...

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Euro zone inflation hits record high 10%, raising pressure on ECB

Euro zone inflation zoomed past forecasts to hit a fresh record high this month, reinforcing expectations for another jumbo interest rate hike from the European Central Bank in October. Price growth in the 19 countries sharing the euro accelerated to 10.0% in September from 9.1% a month earlier, data from Eurostat showed on Friday, beating expectations for a reading of 9.7%. Figures a day earlier had shown inflation in Germany, the bloc’s biggest economy, jumping to its highest rate since the time of the Korean War 70 years ago. Inflation ...

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EU watchdog says banks need $1.2 billion to meet capital rules in full

Banks in the European Union will collectively need a further 1.2 billion euros ($1.18 billion) to meet a set of global capital rules in full by 2028, the bloc’s banking watchdog said. In the latest sign of how well capitalised lenders in the bloc have become in broad terms, the European Banking Authority said on Friday that implementing the Basel III global accord in full would result in an average increase of 15% in current core ‘Tier 1’ capital buffers, with much of the shortfall among smaller, domestic-focused lenders. Banks ...

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UK economy grew in Q2 but was below pre-pandemic size

Britain’s economy grew in the second quarter but was still below its pre-pandemic peak, contrary to earlier estimates that it had recovered, according to official data which also showed the country’s current account deficit was narrower than expected. The Office for National Statistics said economic output rose by 0.2% in April through June, revised up from a previous reading of a 0.1% contraction. But the ONS revised down its estimate for Britain’s recovery from the COVID-19 pandemic. “The level of real GDP is now estimated to be 0.2% below where ...

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