MONEY LIVE | Fed fears hit markets, JSE down 1%.
Global equities sank Wednesday on bets the US Federal Reserve will act more aggressively to bring inflation under control.
The minutes from the Fed's March meeting will be pored over for insights into the thinking of US central bankers, in light of the Ukraine war and recent data suggesting the world's top economy remains resilient. "However, there remain significant headwinds for equities and the latest trouble spot is what the Federal Reserve might do to curb inflation."
Brainard also said bank policymakers were ready to start reducing its vast bond holdings, which have helped keep borrowing costs down. Britain slapped new sanctions on Russia Wednesday over its invasion of Ukraine, targeting two banks and eliminating all Russian oil and coal imports by the end of the year.
Both Discovery and Momentum Metropolitan have credit ratings that are higher than South Africa’s national credit rating. Moody also affirmed the ratings of the big five South African banks, changing their outlook to stable from negative.Grand Parade Investments has announced that its catering equipment group Mac Brothers has been placed in voluntary liquidation. The company previously said there was a further decline in the loss-making subsidiary.
Investors fear that a more restrictive U.S. central bank could end up tipping the world’s largest economy into a downturn, or even a recession. Quantitative tightening alongside rate rises may have a more rapid impact given current debt levels, he said. Meanwhile, the latest data from China indicated that activity in its services industry contracted in March amid mobility curbs to stem a Covid outbreak.The newspaper and packaging group Caxton is buying two businesses from the Swiss-headquartered packaging company Amcor in a deal worth R90 million.
In acquiring 34.95% of RBPlat – with an option to grow the share to 38% over time – the Takeover Regulation Panel last week ruled Northam had not triggered a mandatory offer. Shares were mixed in Japan and fluctuated in South Korea, where faster inflation added to the case for more interest-rate hikes.Oil advanced on renewed fears about supply disruptions due to the war. The European Union is working on new Russian sanctions, while the U.S. said it may impose further penalties this week. Russia rejected allegations of war crimes.
“Between now and June we’re going to get a lot of information the market has to price in,” Subadra Rajappa, head of U.S. rates strategy at Societe Generale SA, said on Bloomberg Television.In the latest step to punish Russia, dollar debt payments from Russian government accounts at U.S. financial institutions have been halted, according to a person with knowledge of the matter.
The auction held in Jaipur, India, last month auctioned off predominantly commercial quality rough emeralds extracted by Gemfields' majority-owned Kagem Mining in Zambia. Gemfields said the proceeds of the auction will be fully repatriated to Kagem in Zambia, with all royalties due to the government of Zambia to be paid on the full sales prices achieved at the auction.Tharisa appoints mining veteran Bernard Pryor as head of Karo Mining Holdings
Chinese tech shares in Hong Kong rose 3% after Beijing sought to modify a rule that restricts offshore-listed firms from sharing sensitive financial data with foreign regulators. That may allow the U.S. to gain full access to audits, reducing the risk of Chinese firms losing their Wall Street listings.
The Fed minutes later this week will shape views on the odds of a half percentage-point rate increase in May and provide key details on how the central bank will shrink its balance sheet. Analysts said the report bolstered the case for the Federal Reserve to hike interest rates by half a percentage point at its meeting next month.
Absa’s purchasing managers’ index, compiled by the Bureau for Economic Research, climbed to 60, from 58.6 month earlier. That’s the highest monthly reading since record keeping began in September 1999. The median of six economists’ estimates in a Bloomberg survey was 58.3. Surges in the price of oil, food, fertilizer and other raw materials drove the purchasing price index up by 6 points to 95.9, the highest level since September 1999. Survey respondents flagged sustained high prices stemming from the war in Ukraine along with domestic fuel price increases, supply chain disruptions and heightened shortages of key inputs amid coronavirus lockdowns in China as key concerns.
"The recession risk of selected countries such as Germany from the stopping of gas delivery would be non-negligible," said Sebastien Galy, senior macro strategist at Nordea Asset Management. In its place"a bear era of government intervention, social and political polarization, Main Street inflation & geopolitical isolationism starting," they added.
U.S. crude futures fell more than $2 a barrel to $98.17 and Brent futures were also down $2 at $102.66 a barrel. An inversion in this part of the U.S. yield curve is viewed as a reliable signal that a recession may follow in one to two years. Benchmark 10-year notes last yielded 2.4170%, while the two-year yield was at 2.4057%.
MSCI Inc.’s Asia-Pacific index came off session lows, aided by turnarounds in Japan and China, where markets continue to expect steps to bolster growth. S&P 500 and Nasdaq 100 contracts rose and Europe’s were steady following the worst quarter for global stocks since the pandemic bear market. Oil held losses on a move by the U.S. to release roughly a million barrels a day from reserves to tackle rising energy costs.
Downgraded growth outlooks in the U.S., Europe and China are “something to watch very carefully,” Anwiti Bahuguna, head of multi-asset strategy at Columbia Threadneedle Investments, said on Bloomberg Television. The Russian government has so far stayed current on its debt obligations. JPMorgan Chase & Co. Thursday processed a nearly $447 million payment for dollar debt due in 2030. Another deadline is approaching on April 4.US stocks fell on Thursday on worries about the raging conflict in Ukraine and the outlook for U.S. interest rate hikes, putting the main indexes on course for their worst quarter since the pandemic crash in 2020.
The war-induced surge in commodity prices has amplified inflation worries, while a more hawkish Federal Reserve stoked growth concerns, together pushing the three main U.S. indexes toward their worst quarter since March 2020. The S&P energy index slipped as oil prices plunged over 4% as the United States considers the largest ever release from its Strategic Petroleum Reserve.
"After consultation with allies and partners, the president will announce the largest release of oil reserves in history, putting one million additional barrels on the market per day on average - every day - for the next six months," a statement said, confirming expectations of the dramatic move.
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