Once a hawk, always a hawk. Barely a week after his reappointment and probably spooked by the latest coronavirus scare, Jerome Powell showed his claws to the inflation monster, signalling that it’s time to wrap up bond purchases a few months sooner and retired the word “transitory” to describe high inflation. Bloomberg reports that could open the door to earlier interest-rate hikes, with money markets showing about 60 basis points of increases priced in by end-2022.
The Federal Reserve chair’s hawkish comments saw a volatile New York trading session, a big sell-off on Wall Street and losses in commodity markets. Worrying words from Moderna’s CEO that the current Covid-19 vaccines could see a big drop in effectiveness against omicron also didn’t help.
This morning however, crude oil, commodities and commodity-linked currencies rebounded, with the rand strengthening to R15.77 against the US unit from a high of R16.30 less than a week ago. Gold, platinum and palladium all jumped, with the metals respectively trading up 0.67% at $1,786.88, 1.91% at $959.00 and 2.47% at $1,785.00. Brent oil was 1.39% more expensive at $71.55 a barrel.
Locally, the latest Household Affordability Index by the Pietermaritzburg Economic Justice & Dignity group shows that food prices are marginally cheaper in November, following steep price hikes in October. But year-on-year changes are more significant, the group’s data shows, with the same basket costing 6.3% more – higher than headline inflation.
Meanwhile, the health focus will be averted from omicron to HIV as we observe World Aids Day and at least spare a thought for the millions of people battling a twin pandemic. The experts say the HIV pandemic isn’t going anywhere until a cure is found, but for now South Africa should protect its victories.
A UNICEF report says 120,000 children died of Aids-related causes last year, while at least 300,000 children were newly infected with HIV in the same period. UNICEF’s latest HIV and Aids global snapshot warns that the prolonged Covid-19 pandemic is deepening the inequalities that have long driven HIV infections.
South Africa is at a crossroads in its quest to end Aids by 2030. It would certainly be an honour to go down in history as the country that did more than any other to end the Aids pandemic!
Here’s a roundup of the world’s top and most interesting headlines:
SA Business
R3.4 billion injected in automotive sector to boost East London economic recovery – SABC News
Budget impact: Crucial funding must be allocated to treat drivers of HIV in South Africa – Daily Maverick
Public Protector clears Gordhan and Eskom board over Oberholzer complaint – Fin24
Global Business
China pledges to support Africa without ‘imposing its will’ – African Insider
Elon Musk jokes about whistleblowers with new Tesla product – BBC News, and the $50 whistle inspired by the Cybertruck is already sold out
Founder-led firms are winners. Except Twitter – Bloomberg
Markets
Asian markets mostly up, oil rallies as virus and Fed hold attention – AFP
Fed Chair Powell retires ‘transitory’, the dollar flies – Investing.com
Gold up, but near one-month low, over hawkish Powell comments – Investing.com
Opinion/In-depth
The Guptas’ poisonous legacy: How State Capture hobbled Alexkor – Daily Maverick
Global economy rebounds, but for how long? – AFP
EXPLAINER | Transmissibility, quirks and the S-gene: The race to trace the Omicron variant – News24
Video
Would you let your kids play with these toys? – NYT Opinion
Moderna CEO’s vaccine warning rattles markets – Reuters
Aspen CEO speaks on Aspenovax – eNCA
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