AFP

Asian markets rally in early trading, building on US gains

Asian markets rallied in early trading on Monday, building on the momentum of gains in the United States and Europe at the end of last week, as investors price in the expectation of further interest rate hikes aimed at taming inflation.

Equities in Japan, Australia, Singapore, Taiwan and Jakarta surged, while markets in Hong Kong, China and South Korea were closed for a public holiday.

The euro continued to gain against the dollar, with investors in Europe weighing the prospect of the European Central Bank (ECB) following the US Federal Reserve’s lead and raising key rates.

On Sunday, German central bank president Joachim Nagel signalled the ECB would probably continue raising interest rates to curb runaway inflation.

Nagel predicted inflation in Europe might peak at more than 10 percent in December.

The ECB raised the key rate by a historic 75 basis points last week, and markets expect a similar-sized hike at an October meeting.

This week, investors worldwide will be closely watching US inflation data for August, due to be released on Tuesday, with the consumer price index (CPI) expected to ease slightly to eight percent — still well above the Fed’s two-percent target.

Traders expect the Fed to impose another large hike in interest rates next week, after two 75-basis-point increases already.

“A downside surprise in US CPI is likely more of a concern and that could see the dollar weakening further,” Charu Chanana, a strategist at Saxo Capital Markets, told Bloomberg Television.

“We’ve seen some glimpses of that… towards the end of last week. That could potentially be a risk to watch particularly this week.”

– ‘Soft landing’ hopes –

On Sunday, US Treasury Secretary Janet Yellen said she was hopeful the US economy could avoid a recession, but that the Fed would need to skilfully manage interest rates and also rely on “some good luck to achieve what we sometimes call a soft landing”.

“My hope is we will achieve a soft landing, but Americans know it’s essential to bring inflation down and, over the longer run, we can’t have a strong labour market without inflation under control,” she told CNN.

Yellen said that while the US economy’s growth rate was slowing, the labour market remained “exceptionally strong”, with almost two openings for every jobseeker.

In addition to the US CPI figures on Tuesday, traders will be closely watching UK CPI on Wednesday, and European CPI and China home sales, retail sales and industrial production data on Friday.

In Tokyo, stocks opened higher on Monday, driven by positive market sentiment off the back of last week’s gains and a weaker yen.

The dollar fetched 142.65 yen in early Asian trade, against 142.56 yen on Friday in New York.

“A cheaper yen is positive for corporate performances, despite recent media reports” that highlight the negative aspects of the weak yen, said chief strategist Masayuki Kubota of Rakuten Securities.

On Friday, Bank of Japan chief Haruhiko Kuroda met Prime Minister Fumio Kishida, saying the rapid weakening of the currency was “undesirable”, an indication of possible upcoming action to arrest the fall.

– Key figures at around 0300 GMT –

Tokyo – Nikkei 225: UP 1.1 percent at 28,528.90 

Hong Kong – Hang Seng Index: UP 2.7 percent at 19,362.25 (closed for public holiday Monday)

Shanghai – Composite: UP 0.8 percent at 3,262.05 (closed for public holiday Monday)

New York – Dow: UP 1.2 percent at 32,151.71 (close)

New York – S&P 500: UP 1.5 percent at 4,067.36 (close)

New York – Nasdaq: UP 2.1 percent at 12,112.31 (close)

London – FTSE 100: UP 1.2 percent at 7,351.07 (close)

Frankfurt – DAX: UP 1.4 percent at 13,088.21 (close)

Paris – CAC 40: UP 1.4 percent at 6,212.33 (close)

EURO STOXX 50: UP 1.6 percent at 3,570.04 (close)

Euro/dollar: UP at $1.0085 from $1.0046 

Pound/dollar: UP at $1.1609 from $1.1587  

Euro/pound: UP at 86.86 pence from 86.84 pence

Dollar/yen: UP at 142.65 yen from 142.56 yen 

Brent North Sea crude: DOWN 1.4 percent at $91.57 per barrel

West Texas Intermediate: DOWN 1.5 percent at $85.49 per barrel

Western arms production to ramp up as Ukraine burns through stockpiles

Western governments are mobilizing their arms manufacturers to ramp up production and replenish stockpiles heavily diminished by supplying Ukraine’s six-month-old battle against Russia’s invasion.

US Defense Secretary Lloyd Austin announced this week a meeting of senior national armaments directors from allied countries to make long-term plans for supplying Ukraine and rebuilding their own arms reserves.

“They will discuss how our defense industrial bases can best equip Ukraine’s future forces with the capabilities that they need,” he said at a meeting at Ramstein Air Force Base in Germany of the Ukraine Contact Group, 50 countries currently supporting the war effort.

On Friday, the Pentagon’s arms acquisition chief Bill LaPlante said the meeting would take place in Brussels on September 28.

The goal is to determine “how we can continue to work together to ramp up production of key capabilities and resolve supply chain issues and increase interoperability and interchangeability of our systems,” LaPlante told reporters at the Pentagon.

– Billions more for arms –

NATO countries do not all have the same weapons, but their arms are compatible. So ammunition manufactured in one country in the Atlantic alliance can be used by another.

At the start of the war, Ukraine’s military mostly used weapons and munitions that matched Russian standards. But within a few months those were exhausted — especially in crucial artillery and missile systems — and it has grown to depend on Western allies with NATO-standard arms.

But that in turn has drawn down large amounts of munitions the allies had kept for their own defense.

Rebuilding those supplies is now crucial. 

In July, the European Union announced 500 million euros for joint purchases over the next two years to replenish arms provided to Kyiv.

The priority is more anti-armor and anti-aircraft missile systems, and 155mm artillery pieces and ammunition.

EU countries “have drawn on their stocks of ammunition, light and heavy artillery, anti-aircraft and anti-tank defense systems, and even armored vehicles and tanks,” European Commissioner Thierry Breton said at the time.

“This has created a de facto vulnerability that now needs to be addressed urgently,” he warned.

The United States, the primary defense supplier of Ukraine since the war began, has pledged $15.2 billion worth of weaponry, including Javelin anti-tank missiles, artillery and ammunition compatible with NATO weaponry.

– Boosting production –

The Pentagon has furnished some 800,000 155mm artillery rounds to Ukraine, while United States has just one factory making them, the General Dynamics plant in Scranton, Pennsylvania that produces only 14,000 rounds a month.

“We have plans…  to get that in increments ultimately up to 36,000 a month in about three years,” said LaPlante.

But that would take annual production to just over half of what Washington has given the Ukrainians in less than six months.

The Pentagon wants allies to ramp up their own production lines to help replenish stockpiles.

The US military has recently announced a slew of new contracts with arms manufacturers inside and outside the United States to do this. 

It includes $364 million for 250,000 rounds of 155mm artillery ammunition from multiple makers, $624 million for Stinger anti-aircraft missiles, $324 million for Javelin anti-tank missiles, and millions more for other weapons systems, ammunition and defense supplies.

Dave Butler, spokesman for the Pentagon’s joint chiefs of staff, said the decision is guided by but not determined specifically by US manufacturing capacities.

“Ukraine’s needs for a given weapon are the ultimate driving factor,” he said.

Grief, solidarity as US marks 21st anniversary of 9/11

The United States on Sunday observed the 21st anniversary of the 9/11 attacks, with President Joe Biden recalling Americans’ sacrifice and honoring the nearly 3,000 people killed when hijacked planes hit the Twin Towers, the Pentagon and a Pennsylvania field.

Relatives of victims, police officers, firefighters and city leaders gathered at the National September 11 Memorial in Lower Manhattan, where the names of those who died there were read aloud in an hours-long ritual that has occurred annually since the deadliest single attack on US soil.

They rang bells and held moments of silence six times, including at 8:46 am and 9:03 am (1246 and 1303 GMT), the precise minutes the passenger jets struck the World Trade Center’s North and South Towers.

Biden commemorated the anniversary at the Pentagon, where Al-Qaeda hijackers crashed a plane into the massive building that serves as Defense Department headquarters.

In a steady rain, the president approached a wreath of flowers and placed his hand over his heart.

“I know for all those of you who lost someone, 21 years is both a lifetime and no time at all,” Biden said in a somber speech.

“The American story itself changed that day,” he said. “What we cannot change, never will, is the character of this nation” the attackers sought to wound.

“The character of sacrifice and love, of generosity and grace, of strength and resilience,” he said.

Biden also recalled how in the hours after the attacks, Queen Elizabeth II — who died Thursday at age 96 — sent a touching message to the American people.

“She pointedly reminded us: ‘Grief is the price we pay for love,'” Biden said.

Al-Qaeda hijacked a total of four planes. The third hit the Pentagon and the fourth, United Flight 93, was reportedly headed to the US Capitol Building when passengers and crew onboard fought the hijackers.

The plane crashed in a field near Shanksville, Pennsylvania, killing all aboard.

First Lady Jill Biden attended a ceremony there Sunday. September 11 “touched us all,” she said. “It changed us all. It reminds us that, with courage and kindness, we can be a light in that darkness.”

She has said that the passengers’ actions on Flight 93 saved scores of lives — possibly including that of her husband, then a US senator who was headed to the Capitol that day.

– ‘Secure our democracy’ –

Vice President Kamala Harris and Mayor Eric Adams were among dignitaries attending the New York event, where relatives hugged and wept, placed flowers at the memorial and held placards with images of their lost loved ones.

“While the grief recedes a bit with time, the permanent absence of my father is just as palpable as it ever was,” the son of Jon Leslie Albert said after reading several victims’ names, including his father’s.

September 11 marked a foreign attack on American soil, but Biden has warned the country faces anti-democratic turmoil from within, notably from his predecessor Donald Trump’s supporters who stormed the US Capitol on January 6, 2021 seeking to overturn the 2020 election.

On Sunday, he subtly touched on the issue, urging Americans to “secure our democracy together.”

“It’s not enough to stand up for democracy once a year or every now and then,” he said. “It’s something we have to do every single day.”

Condolence messages arrived from foreign dignitaries including NATO chief Jens Stoltenberg, Canada’s Prime Minister Justin Trudeau and Ukrainian President Volodymyr Zelensky, who called September 11 “one of the most tragic days” for the US and the world.

“Facing missile attacks daily, Ukraine knows well what terrorism is and sincerely sympathizes with the American people,” Zelensky tweeted.

New York was illuminated late Saturday by a “Tribute in Light” that showed two blue beams, symbolizing the Twin Towers, projecting into the night sky.

In addition to those killed on September 11, thousands of first responders, construction workers and residents have since fallen ill, many of them terminally, as a result of inhaling the toxic fumes.

With 'Barbarian' at the gate, N.American moviegoers shiver

“Barbarian,” a new horror film with a modern twist, has scared its way to the top of North America’s box office, earning an estimated $10 million on yet another slow movie weekend, industry watcher Exhibitor Relations said Sunday.

The film, from 20th Century and New Regency, tells the story of a woman (played by English actress Georgina Campbell) who checks into an AirBnB-type house in a sketchy Detroit neighborhood only to find it has also been booked by Bill Skarsgard — yes, the diabolical clown in the fright-filled “It” movies. Justin Long also stars.

“Barbarian” has enjoyed strong reviews, with Variety calling it a “new horror classic.” David A. Gross of Franchise Entertainment Research said its debut was “a good opening” for a low-budget horror film.

Another new release, fantasy adventure film “Brahmastra: Part One — Shiva” from Disney subsidiary Star Studios, took in $4.4 million for second place — a surprisingly strong showing for a Hindi-language Bollywood production playing in only 810 theaters.

It follows a young man named Shiva in modern-day India where his love for young Isha is complicated by his unexpected connection to a secret society. This is the first chapter in a trilogy.

In third place, down one spot from last weekend, was Sony action thriller “Bullet Train,” at $3.3 million. Brad Pitt stars as a paid killer on a high-speed Japanese train.

Meantime, Paramount’s enduring action flick “Top Gun: Maverick” — which placed a surprising first last weekend in its 15th week out — lost a bit of altitude. It took in $3.2 million for fourth place, even while nearing the $750 million mark overseas.

And in fifth, down one notch from last weekend, was Warner Bros.’ family-friendly animation “DC League of Super-Pets,” at $2.8 million.

Rounding out the top 10 were:

“The Invitation” ($2.6 million)

“Lifemark” ($2.2 million)

“Beast” ($1.8 million)

“Minions: The Rise of Gru” ($1.7 million)

“Spider-Man: No Way Home” ($1.3 million)

Grief, solidarity as US marks 21st anniversary of 9/11

The United States on Sunday observed the 21st anniversary of the 9/11 attacks, with President Joe Biden recalling Americans’ sacrifice and New Yorkers honoring the nearly 3,000 people killed when hijacked planes destroyed the Twin Towers.

Relatives of victims, police officers, firefighters and city leaders gathered at the National September 11 Memorial in Lower Manhattan, where the names of those who died were read aloud in an hours-long ritual that has occurred annually since the deadliest single attack on US soil.

They rang bells and held moments of silence six times, including at 8:46 am and 9:03 am (1246 and 1303 GMT), the precise minutes the passenger jets struck the World Trade Center’s North and South Towers.

Biden commemorated the anniversary at the Pentagon, where Al-Qaeda hijackers crashed a plane into the massive building that serves as Defense Department headquarters.

In a steady rain, the president approached a wreath of flowers and placed his hand over his heart.

“I know for all those of you who lost someone, 21 years is both a lifetime and no time at all,” Biden said in a somber speech outside the Pentagon.

“The American story itself changed that day,” he said. “What we cannot change, never will, is the character of this nation” the attackers sought to wound.

“The character of sacrifice and love, of generosity and grace, of strength and resilience,” he said.

Biden also recalled how in the hours after the attacks, Queen Elizabeth II — who died Thursday at age 96 — sent a touching message to the American people.

“She pointedly reminded us: ‘Grief is the price we pay for love,'” Biden said.

Al-Qaeda hijacked a total of four planes. The third hit the Pentagon and the fourth, Flight 93, crashed in a field near Shanksville, Pennsylvania after passengers launched a revolt onboard.

First Lady Jill Biden attended a ceremony there Sunday.

– ‘Secure our democracy’ –

Vice President Kamala Harris and Mayor Eric Adams were among dignitaries attending the New York event, where relatives hugged and wept, placed flowers at the memorial and held placards with images of their lost loved ones.

“While the grief recedes a bit with time, the permanent absence of my father is just as palpable as it ever was,” the son of Jon Leslie Albert said after reading several victims’ names, including his father’s.

September 11 marked a foreign attack on American soil, but Biden has warned the country faces anti-democratic turmoil from within, notably from his predecessor Donald Trump’s supporters who stormed the US Capitol on January 6, 2021 seeking to overturn the 2020 election.

On Sunday he subtly touched on the issue, urging Americans to “secure our democracy together.”

“It’s not enough to stand up for democracy once a year or every now and then,” he said. “It’s something we have to do every single day.”

Condolence messages arrived from foreign dignitaries including NATO chief Jens Stoltenberg, Canada’s Prime Minister Justin Trudeau and Ukrainian President Volodymyr Zelensky, who called September 11 “one of the most tragic days” for the US and the world.

“Facing missile attacks daily, Ukraine knows well what terrorism is and sincerely sympathizes with the American people,” Zelensky tweeted.

New York was illuminated late Saturday by a “Tribute in Light” that showed two blue beams, symbolizing the Twin Towers, projecting into the night sky.

In addition to those killed on September 11, thousands of first responders, construction workers and residents have since fallen ill, many of them terminally, as a result of inhaling the toxic fumes.

'It came from the gut': New mother Jennifer Lawrence returns with 'Causeway'

When Jennifer Lawrence was offered a script about a wounded US Army engineer who returns from Afghanistan to a strained relationship with her mother, she was on a sabbatical from acting and not yet a parent.

The Oscar-winning “Silver Linings Playbook” star, 32, whose fame had rocketed ever since the wildly popular “The Hunger Games” movies, had been a near-ubiquitous presence with a prolific run of movies, before announcing a pause because “everybody had gotten sick of me.”

But when she read a script for “Causeway” — then entitled “Red, White, and Water” — something changed.

“It was really just something that came from the gut, just like this urgency,” she told AFP at the Toronto film festival.

“I was very clear that I didn’t want to work, and then somehow it landed on my desk, and I just had this sense of urgency, like ‘let’s make it, let’s do this.'”

The subtle, character-driven indie movie — which also became the first project for Lawrence’s fledgling production company — follows military engineer Lynsey’s return to her mother’s home in New Orleans.

A debilitating brain injury following an IED explosion in Afghanistan is not the only trauma she must overcome, as issues from her childhood and family life flood to the surface.

Lawrence chose the film in part to showcase “what these heroes go through to keep us safe.”

“It was wonderful to be able to talk to the amazing men and women who have served, to try to get some more information and background,” she said on the red carpet of the film’s world premiere Saturday.

– Motherhood –

But she also partly drew on her own childhood for the role in “Causeway,” in which Lynsey has a fractious relationship with her unreliable mother.

“I have complications in my childhood just like everybody else does — so it was more kind of working that out,” she said of the film, which began shooting in 2019 before it was interrupted by the pandemic and eventually resumed in 2021.

During that delay Lawrence also filmed and promoted doomsday comedy “Don’t Look Up.”

And she has since become a mother herself, giving birth earlier this year to her son Cy.

“Oh God, everything changes after you become a mom!” she told AFP.

“How am I complicating his life? I don’t know yet,” she joked.

The film sees Lynsey build an unlikely friendship with James, played by Brian Tyree Henry, an auto repair worker who fixes her truck when it breaks down. 

While both grew up in New Orleans, their backgrounds are very different.

But he too has a family trauma buried deeply in his past, which the two bond over, in a relationship which soon forms the emotional anchor of the film.

– ‘Invisible injury’ –

“This film is an excavation of how we begin to process, how we manage, how we actually change, how we start to connect again,” said director Lila Neugebauer, making her film debut after success on Broadway.

“Both Jen and Brian connect so deeply with their characters on this film, as actors and as human beings.”

For Lawrence, there was “something about this woman who has been through so much, and is suffering from this invisible injury, and trying to rebuild her home and where she belongs.”

“There was something that deeply connected with me,” she said. 

“Causeway” will be released November 4 in select theaters and on Apple TV+. The Toronto International Film Festival runs through September 18.

Spielberg confronts his childhood as 'Fabelmans' premieres in Toronto

Steven Spielberg finally turned the camera on his own childhood — from his parents’ troubled marriage to anti-Semitic bullying — as his new movie “The Fabelmans” received its world premiere on a star-studded Saturday at the Toronto film festival.

Considered one of Hollywood’s greatest living directors, with classics from “Jaws” to “E.T.”, Spielberg told a rapturous audience how he had long wanted to make such a deeply personal movie, but had eventually been motivated by the “fear” of the pandemic.

“I don’t think anybody knew in March or April of 2020 what was going to be the state of the art, the state of life, even a year from then,” said Spielberg.

“I just felt that if I was going to leave anything behind, what was the thing that I really need to resolve and unpack about my mom and my dad and my sisters?” he said after the screening at North America’s biggest film festival.

“It wasn’t now or never, but it almost felt that way,” said the 75-year-old.

The movie — which will be released in November — is technically semi-autobiographical, following young Sammy Fabelman and his family, although the parallels to Spielberg’s own life could hardly be more clear.

Like the real Spielberg, the Fabelmans move from New Jersey to Arizona and eventually California, with Sammy falling in love with filmmaking and honing his craft as a young director with the help of willing friends and improvised camera tricks.

“It was really using glue and spit, trying to figure out how to put things together,” recalled Spielberg after the film, which recreates many of the amateur movies he made as a teenager.

“I made all the behind-the-scenes stuff in this movie much better than the actual 8mm films I shot… it was a great do-over!”

– ‘Outsider’ –

While directing and filmmaking are a source of comfort and escapism for young Sammy, the movie tackles head-on his problems at home, including within the marriage of his parents — played by Michelle Williams and Paul Dano.

Another sequence recalls anti-Semitic taunts by two bullies at his California high school — a real-life incident Spielberg said he wanted to include in the film, without placing it center stage.

“Bullying is only a small aspect of my life. Anti-semitism is an aspect of my life but it isn’t any kind of a governing force in my life,” he said.

“It made me very, very aware of being an outsider growing up.”

Before the screening, Spielberg noted that “The Fabelmans” is his first-ever film to be officially entered at a film festival, marking a coup for the Toronto event.

The Toronto International Film Festival (TIFF), renowned for its large cinephile crowds as well as A-list stars, was hit badly by the pandemic, but this year has seen the return of packed audiences and red carpets.

– No ‘swan song’ –

Earlier on Saturday, Jennifer Lawrence drew screaming fans to the red carpet for “Causeway,” an indie drama in which she plays a wounded Army engineer struggling to recover from conflict-zone trauma back in her hometown of New Orleans.

Daniel Craig and the star-studded cast of “Glass Onion: A Knives Out Mystery” arrived in Toronto for the whodunit sequel’s premiere.

Director Rian Johnson and Craig’s gentleman sleuth Benoit Blanc return for a new case featuring Edward Norton’s shady billionaire and his wealthy friends on a private Greek island.

Kate Hudson, Dave Bautista, Janelle Monae and Leslie Odom Jr co-star in the second installment of a budding “Knives Out” franchise which has been taken over by Netflix.

“I’m gonna keep making these until Daniel blocks me on his phone,” joked Johnson after the premiere. 

Similarly, Spielberg assured the Toronto audience that reports he could step away from Hollywood after finally making the “The Fabelmans” were wide off the mark.

“It is not because I have decided to retire and this is my swan song… don’t believe any of that!” he said.

TIFF runs until September 18.

Ethereum blockchain set for 'monumental' overhaul

An army of computer programmers scattered across the globe is set to attempt one of the biggest software upgrades the crypto sector has ever seen this week to reduce its environmentally unfriendly energy consumption.

Developers have spent years working on a more energy-efficient version of the ethereum blockchain, a digital ledger that underpins a multibillion dollar ecosystem of cryptocurrencies, digital tokens (NFTs), games and apps.

Ethereum — the second most important blockchain after bitcoin — burns through more power each year than New Zealand.

Experts say the changeover, expected to take place between Tuesday and Thursday, would slash energy consumption by more than 99 percent.

Enthusiasts hope a greener ethereum will spur wider adoption, particularly as a way of enabling banks to automate transactions and other processes.

But so far the technology has been used largely to create speculative financial products.

The ING bank said in a recent note that the switchover might help ethereum gain acceptability among policymakers and regulators. 

“This in turn may provide a boost to traditional financial institutions’ willingness to develop ethereum-based services,” the bank said.

– ‘Technological milestone’ –

The switchover, dubbed “the merge”, will change the way transactions are logged.

At the moment, so-called crypto miners use energy-guzzling rigs of computers to solve puzzles that reward them with new coins — a system known as “proof of work”.

The new system will get rid of those miners and their computer stacks overnight.

Instead, “validators” will have to put up 32 ether (worth $55,000) — ethereum’s cryptocurrency — to participate in the new “proof of stake” system where they earn rewards for their work.

But the merge process will be risky.

Blockchain company Consensys called it a “monumental technological milestone” and the biggest update to ethereum since it was launched in 2015.

Critics have questioned whether such an upgrade will pass off without incident, given the sector’s history of instability.

Ethereum went offline in May for three hours when a new NFT project sparked a surge in buyers that overwhelmed the network.

Several exchanges and crypto companies said they would halt transactions during the merge process.

– ‘Decentralised and complicated’ –

The upgrade also faces a possible rebellion from crypto mining companies whose business will be severely damaged.

They can try to hijack the process or create a “fork”, basically a smaller blockchain that would continue with the old mechanism.

And even if the “merge” is successful, ethereum will still face major hurdles before it can be more widely adopted.

For example, it is expensive to use and the update will not reduce fees.

And the wider crypto sector is beset by wildly fluctuating prices, security flaws and an array of scams.

Crypto lawyer Charles Kerrigan from the firm CMS told AFP that ethereum was “decentralised and complicated” and had not yet been tested enough for governments and banks to get onboard.

“There have been questions about how easily it could deal with upgrades of the type that traditional software vendors provide to customers,” he said. 

“A successful merge will answer those questions.”

Ethereum blockchain set for 'monumental' overhaul

An army of computer programmers scattered across the globe is set to attempt one of the biggest software upgrades the crypto sector has ever seen this week to reduce its environmentally unfriendly energy consumption.

Developers have spent years working on a more energy-efficient version of the ethereum blockchain, a digital ledger that underpins a multibillion dollar ecosystem of cryptocurrencies, digital tokens (NFTs), games and apps.

Ethereum — the second most important blockchain after bitcoin — burns through more power each year than New Zealand.

Experts say the changeover, expected to take place between Tuesday and Thursday, would slash energy consumption by more than 99 percent.

Enthusiasts hope a greener ethereum will spur wider adoption, particularly as a way of enabling banks to automate transactions and other processes.

But so far the technology has been used largely to create speculative financial products.

The ING bank said in a recent note that the switchover might help ethereum gain acceptability among policymakers and regulators. 

“This in turn may provide a boost to traditional financial institutions’ willingness to develop ethereum-based services,” the bank said.

– ‘Technological milestone’ –

The switchover, dubbed “the merge”, will change the way transactions are logged.

At the moment, so-called crypto miners use energy-guzzling rigs of computers to solve puzzles that reward them with new coins — a system known as “proof of work”.

The new system will get rid of those miners and their computer stacks overnight.

Instead, “validators” will have to put up 32 ether (worth $55,000) — ethereum’s cryptocurrency — to participate in the new “proof of stake” system where they earn rewards for their work.

But the merge process will be risky.

Blockchain company Consensys called it a “monumental technological milestone” and the biggest update to ethereum since it was launched in 2015.

Critics have questioned whether such an upgrade will pass off without incident, given the sector’s history of instability.

Ethereum went offline in May for three hours when a new NFT project sparked a surge in buyers that overwhelmed the network.

Several exchanges and crypto companies said they would halt transactions during the merge process.

– ‘Decentralised and complicated’ –

The upgrade also faces a possible rebellion from crypto mining companies whose business will be severely damaged.

They can try to hijack the process or create a “fork”, basically a smaller blockchain that would continue with the old mechanism.

And even if the “merge” is successful, ethereum will still face major hurdles before it can be more widely adopted.

For example, it is expensive to use and the update will not reduce fees.

And the wider crypto sector is beset by wildly fluctuating prices, security flaws and an array of scams.

Crypto lawyer Charles Kerrigan from the firm CMS told AFP that ethereum was “decentralised and complicated” and had not yet been tested enough for governments and banks to get onboard.

“There have been questions about how easily it could deal with upgrades of the type that traditional software vendors provide to customers,” he said. 

“A successful merge will answer those questions.”

Gas rationing risk means French yoghurt factory faces sour future

Tanker trucks filled with milk collected from across northern France waited in line to unload their precious cargo at one of the country’s biggest yoghurt factories on a recent morning, but this ritual is at risk as the nation considers how to cut energy use.

Like many countries, France plans to shut off businesses first if there is not enough gas or electricity, with European nations facing the prospect of energy shortages this winter following Russia’s invasion of Ukraine.

But energy cuts, or even mandated reductions to businesses, risk causing unexpected and surprising economic consequences, such as a halt in the production of French consumers’ beloved yoghurt.

The French are big on yoghurt, behind only the Dutch in consumption per capita. It is not only a breakfast staple, but often eaten with lunch or as a snack.

But making yoghurt is an energy-intensive process.

For Patrick Falconnier, director of the Eurial Ultra Fresh factory southeast of Paris, it’s quite simple: “No gas” means “no more yoghurt”.

The milk from the tanker trucks, after having gone through rigorous quality controls, is transferred into tanks where it is briefly heated to a high temperature to kill bacteria naturally present.

The pasteurised milk is then ready to be transformed into yoghurt or other dairy products, then kept chilled before being quickly shipped off to supermarkets.

“We’ve been told we could have gas cuts at certain periods this winter, and for us that’s really serious,” Falconnier told AFP.

If a lack of gas prevents the pasteurisation “we couldn’t take deliveries of milk, which means it won’t be collected and this will be dramatic for our farmers who will be forced to throw out their milk,” said Falconnier, who is also head of the Syndifrais association which unites 22 yoghurt manufacturers responsible for 70 percent of French production. 

The impact would be quickly felt within days by consumers as supermarkets receive dairy shipments daily.

“We make products with an average shelf life of 30 days. We make them to be sold the next day,” Falconnier said.

“When I shut down a factory, I halt production and I stop sales and I can’t supply my clients,” he added.

The Eurial Ultra Fresh factory which employs 461 is part of the Agrial agricultural cooperative which has four such facilities.

About 90 percent of their output is sold under brands of major retailers, in France and several other neighbouring European countries.

– ‘Can’t handle another crisis’ –

Falconnier worries that the industry wouldn’t be able to survive such disruptions. 

The pandemic saw staff worn down by high numbers of people off due to illness.

Since the beginning of the war in Ukraine, the surge in prices of energy , packaging and fruits has added 20 percent to costs. 

“We’ve been weakened. We can’t handle another crisis with factory closures. That’s just not possible,” Falconnier said.

French Prime Minister Elisabeth Borne warned industry leaders at the end of August that energy rationing was a risk this winter and urged them to quickly cut consumption.

Government ministers have begun meeting with industrial federations on how to reduce consumption, with a target of a 10 percent drop within two years.

Falconnier says he has considered moving to methane, a gas which can be produced from the breakdown of organic matter from farms, landfills and wastewater treatment plants.

But he estimates this would take five to 10 years and sees little possibility for a quick reduction in energy use. 

“We can’t make investments for a term of six months,” Falconnier said.

“To stop supplies to a factory from one day to the next, that’s shutting it down. We don’t how to manage things differently.”

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