AFP

US says new Africa strategy will engage leaders, rethink military role

The White House on Monday unveiled broad new policy goals for sub-Saharan Africa, with administration officials seeking to tie the region’s democratic, economic and security progress to US national security.

Officials in President Joe Biden’s administration told reporters that the new “U.S. Strategy Toward Sub-Saharan Africa” will actively engage the region’s leaders on issues from climate change to pandemic recovery to food insecurity, while thinking “more holistically” about military engagement on the continent.

Their comments in a background briefing on Sunday come at the end of an extended policy review by the Biden administration, and as US Secretary of State Antony Blinken undertakes a three-nation African trip. He is set to deliver a major policy speech in Pretoria, South Africa on Monday.

The rethinking also comes as some critics say a US focus on fighting extremist groups in Africa militarily has borne little fruit, even while China and Russia have made continued inroads on the huge continent by aggressively using diplomatic and economic tools.

In its policy paper outlining the new US strategy, the Biden administration argues that a push for greater openness and democracy in sub-Saharan Africa will help “counter harmful activities by the People’s Republic of China, Russia and other actors.”

The administration hopes its sharpened focus will culminate in a US-African summit in Washington this December.

The new policy paper suggests that Beijing sees the region as an “arena to challenge the rules-based international order, advance its own narrow commercial and geopolitical interests… and weaken US relations with African peoples and governments.”

It says Russia “views the region as a permissive environment for parastatals and private military companies, often fomenting instability for strategic and financial benefit.”

The administration officials, speaking on the condition of anonymity, expressed considerable concern about the activities in Africa of the shadowy Russian mercenary organization known as the Wagner Group. 

“We’re incredibly concerned about the role of Russian mercenaries,” said one official, adding that the group had committed abuses. “It’s a disturbing trendline.”

The policy paper said that while nearly 70 percent of Africans express strong support for democracy, a string of military coups and the rise of autocrats has left the region with fewer countries classed as free — just eight — than any time in 30 years.

The updated US strategy also intends to increase efforts at fighting terrorism through non-military approaches, though it says the United States will continue to use its “unilateral capability” — read military — against terrorist targets, but “only where lawful and where the threat is most acute.”

Supporting the region’s recovery from the pandemic’s severe health and economic impact “is a prerequisite to regaining Africa’s trust in US global leadership,” while increasing trade and creating jobs, the paper argues.

It also promises assistance for Africa in dealing with the global climate crisis.

Stocks rise, oil falls tracking recession risks

Stock markets largely rose and oil prices retreated Monday as investors mulled the prospect of recession in the United States and elsewhere and central banks seek to tame soaring inflation with aggressive interest rate hikes.

The dollar, which had surged on Friday on the prospect of further large increases in US borrowing costs, fell back on profit-taking at the start of the new week. 

Speculation is growing that the US Federal Reserve will announce a third successive rate increase of three-quarters of a percentage point following a blockbuster US jobs report last week.

This week, all eyes will turn to the release of US July inflation data, which are expected to show a slight slowdown, but still not far from the four-decade highs seen in recent months.

The latest reading “seems very unlikely to offer compelling evidence of a slowdown needed for the Fed to pull away from its aggressive inflation-fighting mode”, said SPI Asset Management analyst, Stephen Innes.

Oil prices retreated further on expectations of weaker demand amid a cost-of-living crisis.

A rise in US crude stockpiles was partly responsible for a 10-percent drop in prices last week.

Both main oil contracts have lost all the gains seen in the wake of Russia’s invasion of Ukraine, which led the United States and Europe to ban imports of Russian crude, hammering already thin supplies.

The US jobs report last week “highlighted how strong the economy remains although traders are now increasingly nervous about more aggressive tightening sending the economy into a deeper recession further down the road”, said Oanda analyst Craig Erlam.

“The resumption of Iran nuclear talks today is one potential downside risk for the oil price, given the ability of the country to quickly ramp up production if a deal is struck.”

Iran on Sunday demanded that the UN nuclear watchdog, the International Atomic Energy Agency, “completely” resolve outstanding issues, as talks resume to revive a 2015 deal to rein in Tehran’s nuclear ambitions.

Iranian sources have suggested that one of the key sticking points is a probe by the IAEA into traces of nuclear material found at undeclared Iranian sites.

– Key figures at around 1100 GMT –

London – FTSE 100: UP 0.5 percent at 7,479.12 points

Frankfurt – DAX: UP 0.7 percent at 13,674.28

Paris – CAC 40: UP 0.9 percent at 6,533.50

EURO STOXX 50: UP 0.9 percent at 3,759.44

Tokyo – Nikkei 225: UP 0.3 percent at 28,249.24 (close)

Hong Kong – Hang Seng Index: DOWN 0.8 percent at 20,045.77 (close)

Shanghai – Composite: UP 0.3 percent at 3,236.93 (close)

New York – Dow: UP 0.2 percent at 32,803.47 (close)

Euro/dollar: UP at $1.0194 from $1.0184 Friday

Pound/dollar: UP at $1.2104 from $1.2075

Euro/pound: DOWN at 84.20 pence from 84.32 pence

Dollar/yen: DOWN at 134.86 yen from 135.00 yen

West Texas Intermediate: DOWN 1.0 percent at $88.09 per barrel

Brent North Sea crude: DOWN 1.1 percent at $93.88 per barrel

Stocks rise, oil falls tracking recession risks

Stock markets largely rose and oil prices retreated Monday as investors mulled the prospect of recession in the United States and elsewhere and central banks seek to tame soaring inflation with aggressive interest rate hikes.

The dollar, which had surged on Friday on the prospect of further large increases in US borrowing costs, fell back on profit-taking at the start of the new week. 

Speculation is growing that the US Federal Reserve will announce a third successive rate increase of three-quarters of a percentage point following a blockbuster US jobs report last week.

This week, all eyes will turn to the release of US July inflation data, which are expected to show a slight slowdown, but still not far from the four-decade highs seen in recent months.

The latest reading “seems very unlikely to offer compelling evidence of a slowdown needed for the Fed to pull away from its aggressive inflation-fighting mode”, said SPI Asset Management analyst, Stephen Innes.

Oil prices retreated further on expectations of weaker demand amid a cost-of-living crisis.

A rise in US crude stockpiles was partly responsible for a 10-percent drop in prices last week.

Both main oil contracts have lost all the gains seen in the wake of Russia’s invasion of Ukraine, which led the United States and Europe to ban imports of Russian crude, hammering already thin supplies.

The US jobs report last week “highlighted how strong the economy remains although traders are now increasingly nervous about more aggressive tightening sending the economy into a deeper recession further down the road”, said Oanda analyst Craig Erlam.

“The resumption of Iran nuclear talks today is one potential downside risk for the oil price, given the ability of the country to quickly ramp up production if a deal is struck.”

Iran on Sunday demanded that the UN nuclear watchdog, the International Atomic Energy Agency, “completely” resolve outstanding issues, as talks resume to revive a 2015 deal to rein in Tehran’s nuclear ambitions.

Iranian sources have suggested that one of the key sticking points is a probe by the IAEA into traces of nuclear material found at undeclared Iranian sites.

– Key figures at around 1100 GMT –

London – FTSE 100: UP 0.5 percent at 7,479.12 points

Frankfurt – DAX: UP 0.7 percent at 13,674.28

Paris – CAC 40: UP 0.9 percent at 6,533.50

EURO STOXX 50: UP 0.9 percent at 3,759.44

Tokyo – Nikkei 225: UP 0.3 percent at 28,249.24 (close)

Hong Kong – Hang Seng Index: DOWN 0.8 percent at 20,045.77 (close)

Shanghai – Composite: UP 0.3 percent at 3,236.93 (close)

New York – Dow: UP 0.2 percent at 32,803.47 (close)

Euro/dollar: UP at $1.0194 from $1.0184 Friday

Pound/dollar: UP at $1.2104 from $1.2075

Euro/pound: DOWN at 84.20 pence from 84.32 pence

Dollar/yen: DOWN at 134.86 yen from 135.00 yen

West Texas Intermediate: DOWN 1.0 percent at $88.09 per barrel

Brent North Sea crude: DOWN 1.1 percent at $93.88 per barrel

Stranded Beluga whale is now stationary in Seine: NGO

A malnourished beluga whale that has swum up France’s River Seine is no longer progressing but is still alive, environmental group Sea Shepherd said Monday.

Hopes are fading to save the animal, which was first spotted on Tuesday in the river that runs through Paris to the English Channel.

“It is alert but not eating,” Sea Shepherd France president Lamya Essemlali told AFP in a text message.

There was, however, “no worsening of its condition”, she said.

Since Friday the whale has been between two locks some 70 kilometres (44 miles) north of the French capital.

Rescuers are considering last-ditch efforts to extract the animal from the Seine as the river’s warm water is harming its health.

One alternative would be to open the locks in the hope that the beluga will swim towards the English Channel, authorities said.

Opening the locks would harbour the risk of the whale moving further upriver towards Paris, which would be even more disastrous.

Several attempts to feed the whale have failed in the past days.

On Saturday, veterinarians administered “vitamins and products to stimulate its appetite”, said a statement on Sunday by the police in Normandy’s Eure department, which is overseeing the rescue effort.

Belugas are normally found only in cold Arctic waters, and while they migrate south in the autumn to feed as ice forms, they rarely venture so far.

An adult can reach up to four metres (13 feet) in length.

According to France’s Pelagis Observatory, specialised in sea mammals, the nearest beluga population is off the Svalbard archipelago, north of Norway, 3,000 kilometres from the Seine.

Japan's SoftBank reports record quarterly net loss

Japan’s SoftBank Group on Monday reported a record quarterly net loss of $23.4 billion, after interest rate hikes tanked tech shares.

The telecom firm-turned-investment behemoth posted a net loss of 3.16 trillion yen, nosediving from a net profit of 761.5 billion yen in the same April-June period the previous year.

“Global stock declines and the rapid depreciation of the yen” contributed to the slump, CEO Masayoshi Son told reporters.

A company statement elaborated, blaming the “global downward trend in share prices due to growing concerns over economic recession driven by inflation and rising interest rates”.

SoftBank’s big stakes in global tech giants and volatile new ventures have made for unpredictable earnings, and it has lurched between record highs and lows in recent years.

The portfolio companies that suffered large losses for the quarter included South Korean e-commerce giant Coupang and US meal delivery platform DoorDash, SoftBank Group said.

The outspoken Son said he wanted to reflect and learn from the huge losses suffered by SoftBank’s technology-focused Vision Fund, which suffered even worse declines than the tech-rich Nasdaq.

“All sorts of things can be used as excuses, such as the bad market environment, the war and the pandemic. But if we had been a bit more selective and made proper investments, we wouldn’t have suffered so much pain,” he said.

“I don’t know how long this winter will continue,” he added, referring to the challenging global situation for business.

“It could be three months. It could be three years,” Son said, joking that his “worries are reflected on his hair”.

– ‘Long-term’ lens –

Japanese media outlets including Kyodo News said the Q1 result was the largest quarterly loss the country has ever seen.

In May, SoftBank reported its worst-ever full-year net loss — and a then-record quarterly loss for Q4 — after a bruising 2021-22 that saw its assets hit by a US tech stocks rout and a regulatory crackdown in China.

That came after logging Japan’s biggest-ever annual net profit in 2020-21, when people moved their lives online during the pandemic and sent tech stocks soaring.

And in 2019-20, SoftBank Group reported a then-record annual net loss of 961.6 billion yen, as the emergence of Covid-19 compounded woes caused by its investment in troubled office-sharing firm WeWork.

SoftBank “faces a very tough situation in the immediate term”, Hideki Yasuda, senior analyst at Toyo Securities, told AFP before the earnings announcement.

“They have to wait for the market to rebound. You have to look at the company through the lens of long-term investment. It may experience one or two bad years, but over a decade or more, the world economy will keep growing and it could grow further.”

The US Federal Reserve and many other central banks have announced aggressive rate increases aimed at battling sky-high inflation linked to the Ukraine war and Covid-related supply chain woes.

But going against the grain, the Bank of Japan has stuck to its long-held monetary easing policies because it sees the latest price hikes as temporary.

This has pushed Japan’s currency down to 24-year lows against the dollar in recent months, driving down the yen value of SoftBank’s investments.

On Monday, Son also announced a new 400 billion yen share buyback, effectively extending its current trillion-yen buyback scheme.

Japan's SoftBank reports record quarterly net loss

Japan’s SoftBank Group on Monday reported a record quarterly net loss of $23.4 billion, after interest rate hikes tanked tech shares.

The telecom firm-turned-investment behemoth posted a net loss of 3.16 trillion yen, nosediving from a net profit of 761.5 billion yen in the same April-June period the previous year.

“Global stock declines and the rapid depreciation of the yen” contributed to the slump, CEO Masayoshi Son told reporters.

A company statement elaborated, blaming the “global downward trend in share prices due to growing concerns over economic recession driven by inflation and rising interest rates”.

SoftBank’s big stakes in global tech giants and volatile new ventures have made for unpredictable earnings, and it has lurched between record highs and lows in recent years.

The portfolio companies that suffered large losses for the quarter included South Korean e-commerce giant Coupang and US meal delivery platform DoorDash, SoftBank Group said.

The outspoken Son said he wanted to reflect and learn from the huge losses suffered by SoftBank’s technology-focused Vision Fund, which suffered even worse declines than the tech-rich Nasdaq.

“All sorts of things can be used as excuses, such as the bad market environment, the war and the pandemic. But if we had been a bit more selective and made proper investments, we wouldn’t have suffered so much pain,” he said.

“I don’t know how long this winter will continue,” he added, referring to the challenging global situation for business.

“It could be three months. It could be three years,” Son said, joking that his “worries are reflected on his hair”.

– ‘Long-term’ lens –

Japanese media outlets including Kyodo News said the Q1 result was the largest quarterly loss the country has ever seen.

In May, SoftBank reported its worst-ever full-year net loss — and a then-record quarterly loss for Q4 — after a bruising 2021-22 that saw its assets hit by a US tech stocks rout and a regulatory crackdown in China.

That came after logging Japan’s biggest-ever annual net profit in 2020-21, when people moved their lives online during the pandemic and sent tech stocks soaring.

And in 2019-20, SoftBank Group reported a then-record annual net loss of 961.6 billion yen, as the emergence of Covid-19 compounded woes caused by its investment in troubled office-sharing firm WeWork.

SoftBank “faces a very tough situation in the immediate term”, Hideki Yasuda, senior analyst at Toyo Securities, told AFP before the earnings announcement.

“They have to wait for the market to rebound. You have to look at the company through the lens of long-term investment. It may experience one or two bad years, but over a decade or more, the world economy will keep growing and it could grow further.”

The US Federal Reserve and many other central banks have announced aggressive rate increases aimed at battling sky-high inflation linked to the Ukraine war and Covid-related supply chain woes.

But going against the grain, the Bank of Japan has stuck to its long-held monetary easing policies because it sees the latest price hikes as temporary.

This has pushed Japan’s currency down to 24-year lows against the dollar in recent months, driving down the yen value of SoftBank’s investments.

On Monday, Son also announced a new 400 billion yen share buyback, effectively extending its current trillion-yen buyback scheme.

Markets mixed as strong US jobs data fans Fed rate hike bets

Markets were mixed Monday and the dollar held big gains as a blockbuster US jobs report ramped up bets that the Federal Reserve will announce more sharp interest rate hikes as it tries to tame runaway inflation.

While the employment reading — which was more than twice as high as expected — indicated the world’s top economy remained resilient despite rising prices and borrowing costs, it will complicate the central bank’s plans to tighten monetary policy.

Traders have hoped that with several indicators pointing to a slowdown, including GDP figures showing a technical recession, policymakers could begin to ease back on their pace of rate hikes.

Now, speculation is growing that the Fed will have to announce a third successive 75 basis-point increase next month, particularly as officials have said their decisions will be data-dependent.

“Friday’s payroll report indicates an overheated labour market that continues to tighten further,” said SPI Asset Management’s Stephen Innes.

“Hence at minimum, the markets expect another 100 basis points of Fed funds rate increases over the next three meetings… with risks skewed towards significant increases.”

All eyes are now on the release this week of US July inflation data, which is expected to show a slight slowdown from June but still at four-decade highs.

The “report seems very unlikely to offer ‘compelling evidence’ of a slowdown needed for the Fed to pull away from its aggressive inflation-fighting mode”, Innes added.

The jobs figures left Wall Street’s main indexes mixed Friday, and Asia followed suit with markets fluctuating in early trade.

However, there was some relief that tensions had calmed since US House Speaker Nancy Pelosi’s visit to Taiwan last week sparked a furious reaction from China, including live-fire military drills around the island that continued Monday.

Hong Kong fell, with little excitement generated by news that the city will cut the amount of time incoming travellers must spend in hotel quarantine.

Singapore, Taipei, Bangkok, Jakarta and Wellington were also down, but Tokyo, Sydney, Seoul, Mumbai and Manila edged up.

Shanghai was boosted by better-than-expected Chinese trade data, though the gains were tempered by fresh worries about Covid lockdowns in the country that threaten the economic recovery.

London, Frankfurt and Paris rose in the morning.

– Oil demand concerns –

The prospect of higher interest rates sent the dollar surging, and it held on to those gains in Asia.

Oil rose but bets on a recession across leading economies continued to fuel concerns about demand — figures last week indicated Americans were driving less now than in summer 2020 at the height of the pandemic.

A rise in US stockpiles was partly responsible for a 10 percent drop in the commodity last week, pushing WTI below $90 for the first time since February.

Both main contracts have lost all the gains seen in the wake of Vladimir Putin’s invasion of Ukraine, which led the United States and Europe to ban imports of Russian crude, hammering already thin supplies.

Fresh talks on Iran’s nuclear programme were being followed.

“The resumption of Iran nuclear talks… is one potential downside risk for the oil price, given the ability of the country to quickly ramp up production if a deal is struck,” said OANDA’s Craig Erlam.

“Not to mention its reportedly large oil and gas reserves. A deal could apparently be struck within days, although we have heard that a lot at times this year.”

– Key figures at around 0810 GMT –

Tokyo – Nikkei 225: UP 0.3 percent at 28,249.24 (close)

Hong Kong – Hang Seng Index: DOWN 0.8 percent at 20,045.77 (close)

Shanghai – Composite: UP 0.3 percent at 3,236.93 (close)

London – FTSE 100: UP 0.2 percent at 7,451.24

Euro/dollar: UP at $1.0205 from $1.0184 Friday

Pound/dollar: UP at $1.2113 from $1.2075

Euro/pound: DOWN at 84.26 pence from 84.32 pence

Dollar/yen: UP at 135.07 yen from 135.00 yen

West Texas Intermediate: UP 0.5 percent at $89.45 per barrel

Brent North Sea crude: UP 0.5 percent at $95.38 per barrel

New York – Dow: UP 0.2 percent at 32,803.47 (close)

Markets mixed as strong US jobs data fans Fed rate hike bets

Markets were mixed Monday and the dollar held big gains as a blockbuster US jobs report ramped up bets that the Federal Reserve will announce more sharp interest rate hikes as it tries to tame runaway inflation.

While the employment reading — which was more than twice as high as expected — indicated the world’s top economy remained resilient despite rising prices and borrowing costs, it will complicate the central bank’s plans to tighten monetary policy.

Traders have hoped that with several indicators pointing to a slowdown, including GDP figures showing a technical recession, policymakers could begin to ease back on their pace of rate hikes.

Now, speculation is growing that the Fed will have to announce a third successive 75 basis-point increase next month, particularly as officials have said their decisions will be data-dependent.

“Friday’s payroll report indicates an overheated labour market that continues to tighten further,” said SPI Asset Management’s Stephen Innes.

“Hence at minimum, the markets expect another 100 basis points of Fed funds rate increases over the next three meetings… with risks skewed towards significant increases.”

All eyes are now on the release this week of US July inflation data, which is expected to show a slight slowdown from June but still at four-decade highs.

The “report seems very unlikely to offer ‘compelling evidence’ of a slowdown needed for the Fed to pull away from its aggressive inflation-fighting mode”, Innes added.

The jobs figures left Wall Street’s main indexes mixed Friday, and Asia followed suit with markets fluctuating in early trade.

However, there was some relief that tensions had calmed since US House Speaker Nancy Pelosi’s visit to Taiwan last week sparked a furious reaction from China, including live-fire military drills around the island that continued Monday.

Hong Kong fell, with little excitement generated by news that the city will cut the amount of time incoming travellers must spend in hotel quarantine.

Singapore, Taipei, Bangkok, Jakarta and Wellington were also down, but Tokyo, Sydney, Seoul, Mumbai and Manila edged up.

Shanghai was boosted by better-than-expected Chinese trade data, though the gains were tempered by fresh worries about Covid lockdowns in the country that threaten the economic recovery.

London, Frankfurt and Paris rose in the morning.

– Oil demand concerns –

The prospect of higher interest rates sent the dollar surging, and it held on to those gains in Asia.

Oil rose but bets on a recession across leading economies continued to fuel concerns about demand — figures last week indicated Americans were driving less now than in summer 2020 at the height of the pandemic.

A rise in US stockpiles was partly responsible for a 10 percent drop in the commodity last week, pushing WTI below $90 for the first time since February.

Both main contracts have lost all the gains seen in the wake of Vladimir Putin’s invasion of Ukraine, which led the United States and Europe to ban imports of Russian crude, hammering already thin supplies.

Fresh talks on Iran’s nuclear programme were being followed.

“The resumption of Iran nuclear talks… is one potential downside risk for the oil price, given the ability of the country to quickly ramp up production if a deal is struck,” said OANDA’s Craig Erlam.

“Not to mention its reportedly large oil and gas reserves. A deal could apparently be struck within days, although we have heard that a lot at times this year.”

– Key figures at around 0810 GMT –

Tokyo – Nikkei 225: UP 0.3 percent at 28,249.24 (close)

Hong Kong – Hang Seng Index: DOWN 0.8 percent at 20,045.77 (close)

Shanghai – Composite: UP 0.3 percent at 3,236.93 (close)

London – FTSE 100: UP 0.2 percent at 7,451.24

Euro/dollar: UP at $1.0205 from $1.0184 Friday

Pound/dollar: UP at $1.2113 from $1.2075

Euro/pound: DOWN at 84.26 pence from 84.32 pence

Dollar/yen: UP at 135.07 yen from 135.00 yen

West Texas Intermediate: UP 0.5 percent at $89.45 per barrel

Brent North Sea crude: UP 0.5 percent at $95.38 per barrel

New York – Dow: UP 0.2 percent at 32,803.47 (close)

Markets struggle as strong US jobs boost Fed rate hike bets

Markets struggled Monday and the dollar held big gains as a blockbuster US jobs report ramped up bets that the Federal Reserve will announce more sharp interest rate hikes as it tries to tame runaway inflation.

While the employment reading — which was more than twice as high as expected — indicated the world’s top economy remained resilient despite rising prices and borrowing costs, it will complicate the bank’s plans to tighten monetary policy.

Traders have hoped that with several indicators pointing to a slowdown, including GDP figures showing a technical recession, policymakers could begin to ease back on their pace of rate hikes.

Now, speculation is growing that the Fed will have to announce a third successive 75 basis-point increase next month, particularly as officials have said their decisions will be data-dependent.

“Friday’s payroll report indicates an overheated labour market that continues to tighten further,” said SPI Asset Management’s Stephen Innes.

“Hence at minimum, the markets expect another 100 basis points of Fed funds rate increases over the next three meetings… with risks skewed towards significant increases.”

All eyes are now on the release this week of US July inflation data, which is expected to show a slight slowdown from June but still at four-decade highs.

The “report seems very unlikely to offer ‘compelling evidence’ of a slowdown needed for the Fed to pull away from its aggressive inflation-fighting mode.” Innes added.

The jobs figures left Wall Street’s main indexes mixed Friday, and Asia followed suit with markets fluctuating in early trade.

However, there was some relief that tensions had calmed since Nancy Pelosi’s visit to Taiwan last week sparked a furious reaction from China that saw it conduct days of live-fire military drills around the island, which contiued Monday.

Hong Kong fell with little excitement generated by news that the city will cut the amount of time incoming travellers must spend in hotel quarantine.

Singapore, Taipei, Bangkok, Jakarta and Wellington were also down, but Tokyo, Sydney, Seoul, Mumbai and Manila edged up.

Shanghai was boosted by better-than-expected Chinese trade data, though the gains were tempered by fresh worries about Covid lockdowns in the country that threaten the economic recovery.

London, Frankfurt and Paris rose at the open.

The prospect of higher interest rates sent the dollar surging, and it held on to those gains in Asia.

Oil rose but bets on a recession across leading economies continued to fuel concerns about demand — figures last week indicated Americans were driving less now than in summer 2020 at the height of the pandemic.

A rise in US stockpiles was partly responsible for a 10 percent drop in the commodity last week, pushing WTI below $90 for the first time since February.

Both main contracts have lost all the gains seen in the wake of Vladimir Putin’s invasion of Ukraine, which led the United States and Europe to ban imports of Russian crude, hammering already thin supplies.

Fresh talks on Iran’s nuclear programme were being followed.

“The resumption of Iran nuclear talks… is one potential downside risk for the oil price, given the ability of the country to quickly ramp up production if a deal is struck,” said OANDA’s Craig Erlam.

“Not to mention its reportedly large oil and gas reserves. A deal could apparently be struck within days, although we have heard that a lot at times this year.”

– Key figures at around 0720 GMT –

Tokyo – Nikkei 225: UP 0.3 percent at 28,249.24 (close)

Hong Kong – Hang Seng Index: DOWN 0.8 percent at 20,040.95

Shanghai – Composite: DOWN 0.3 percent at 3,236.93 (close)

London – FTSE 100: UP 0.5 percent at 7,480.08

Euro/dollar: DOWN at $1.0177 from $1.0184 Friday

Pound/dollar: UP at $1.2079 from $1.2075

Euro/pound: DOWN at 84.25 pence from 84.32 pence

Dollar/yen: UP at 135.37 yen from 135.00 yen

West Texas Intermediate: UP 0.9 percent at $89.78 per barrel

Brent North Sea crude: UP 0.8 percent at $95.71 per barrel

New York – Dow: UP 0.2 percent at 32,803.47 (close)

Markets struggle as strong US jobs boost Fed rate hike bets

Markets struggled Monday and the dollar held big gains as a blockbuster US jobs report ramped up bets that the Federal Reserve will announce more sharp interest rate hikes as it tries to tame runaway inflation.

While the employment reading — which was more than twice as high as expected — indicated the world’s top economy remained resilient despite rising prices and borrowing costs, it will complicate the bank’s plans to tighten monetary policy.

Traders have hoped that with several indicators pointing to a slowdown, including GDP figures showing a technical recession, policymakers could begin to ease back on their pace of rate hikes.

Now, speculation is growing that the Fed will have to announce a third successive 75 basis-point increase next month, particularly as officials have said their decisions will be data-dependent.

“Friday’s payroll report indicates an overheated labour market that continues to tighten further,” said SPI Asset Management’s Stephen Innes.

“Hence at minimum, the markets expect another 100 basis points of Fed funds rate increases over the next three meetings… with risks skewed towards significant increases.”

All eyes are now on the release this week of US July inflation data, which is expected to show a slight slowdown from June but still at four-decade highs.

The “report seems very unlikely to offer ‘compelling evidence’ of a slowdown needed for the Fed to pull away from its aggressive inflation-fighting mode.” Innes added.

The jobs figures left Wall Street’s main indexes mixed Friday, and Asia followed suit with markets fluctuating in early trade.

However, there was some relief that tensions had calmed since Nancy Pelosi’s visit to Taiwan last week sparked a furious reaction from China that saw it conduct days of live-fire military drills around the island, which contiued Monday.

Hong Kong fell with little excitement generated by news that the city will cut the amount of time incoming travellers must spend in hotel quarantine.

Singapore, Taipei, Bangkok, Jakarta and Wellington were also down, but Tokyo, Sydney, Seoul, Mumbai and Manila edged up.

Shanghai was boosted by better-than-expected Chinese trade data, though the gains were tempered by fresh worries about Covid lockdowns in the country that threaten the economic recovery.

London, Frankfurt and Paris rose at the open.

The prospect of higher interest rates sent the dollar surging, and it held on to those gains in Asia.

Oil rose but bets on a recession across leading economies continued to fuel concerns about demand — figures last week indicated Americans were driving less now than in summer 2020 at the height of the pandemic.

A rise in US stockpiles was partly responsible for a 10 percent drop in the commodity last week, pushing WTI below $90 for the first time since February.

Both main contracts have lost all the gains seen in the wake of Vladimir Putin’s invasion of Ukraine, which led the United States and Europe to ban imports of Russian crude, hammering already thin supplies.

Fresh talks on Iran’s nuclear programme were being followed.

“The resumption of Iran nuclear talks… is one potential downside risk for the oil price, given the ability of the country to quickly ramp up production if a deal is struck,” said OANDA’s Craig Erlam.

“Not to mention its reportedly large oil and gas reserves. A deal could apparently be struck within days, although we have heard that a lot at times this year.”

– Key figures at around 0720 GMT –

Tokyo – Nikkei 225: UP 0.3 percent at 28,249.24 (close)

Hong Kong – Hang Seng Index: DOWN 0.8 percent at 20,040.95

Shanghai – Composite: DOWN 0.3 percent at 3,236.93 (close)

London – FTSE 100: UP 0.5 percent at 7,480.08

Euro/dollar: DOWN at $1.0177 from $1.0184 Friday

Pound/dollar: UP at $1.2079 from $1.2075

Euro/pound: DOWN at 84.25 pence from 84.32 pence

Dollar/yen: UP at 135.37 yen from 135.00 yen

West Texas Intermediate: UP 0.9 percent at $89.78 per barrel

Brent North Sea crude: UP 0.8 percent at $95.71 per barrel

New York – Dow: UP 0.2 percent at 32,803.47 (close)

Close Bitnami banner
Bitnami