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January 11. The Egyptian pound has fallen to a historic low
The Egyptian currency has fallen to a historic low. The exchange rate of the US dollar against the Egyptian pound rose today to the level of 32.195, adding 16.3%. Over the past 12 months, Egypt's national currency has depreciated by more than 76%.
The weakening of the pound began after the International Monetary Fund yesterday outlined the details of a $3 billion aid package to the country. Egypt has committed itself to introduce a flexible exchange rate, strengthen the role of the private sector in the country's economy, and carry out a number of monetary and fiscal reforms.
In addition, among its obligations is to reduce investments in state and national projects in order to reduce inflation and reduce foreign currency spending.
Recall that Egypt faced a shortage of foreign currency, despite the sharp depreciation of the Egyptian pound last year. A year ago, the currency was trading in a narrow range below 16 Egyptian pounds per dollar. However, in March and October 2022, the Central Bank of Egypt allowed the pound to depreciate sharply. On October 27, the Egyptian pound fell by 15% after the announcement of a new financing package from the International Monetary Fund. Then the regulator announced that it was moving to a more flexible currency regime.
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January 12. Gold exceeded $1900 amid the inflation data in the United States
The price of the February gold futures soared by 1.28% today and reached $1905 per troy ounce. Above the $1,900 mark, gold is trading for the first time since May 2022.
The driver of growth to an eight-month high was the weakening of the dollar on the eve of the release of US inflation data for December. The dollar index lost 0.79% and reached 102.09 points, which was the lowest since June 2022. And as you know, the weakening of the dollar makes gold more attractive to holders of other currencies.
According to the US Department of Labor, by the end of December, the year-on-year growth in consumer prices slowed to 6.5% against 7.1% in November, which coincided with analysts' forecasts. Core inflation (excluding food and energy prices) at the end of December amounted to 5.7% year-on-year, which also meets the expectations of experts. In November, this figure was 6%.
Analysts note that the pressure on the US currency is also exerted by a decrease in the yields of US government bonds. This suggests that fears that inflation will remain at a high level, forcing the Fed to maintain a tight monetary policy for longer, are gradually weakening.
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January 13. Germany's GDP grew by 1.9% in 2022
According to the Federal Statistical Agency of Germany, the German economy grew by 1.9% in 2022. For comparison, in 2021, the country's GDP increased by 2.6%. The average growth rate for the period from 2011 to 2021 was 1%.
As noted in the agency's report, Europe's largest economy suffered last year from the energy crisis, high inflation, rising interest rates and disruptions in supply chains. The Covid-19 pandemic, though fading, is also having its negative impact on the economy.
The volume of GDP last year was 0.7% higher than the indicator of the pre-pandemic 2019. The main engine of growth of the German economy was consumer spending, which increased by 4.6% in 2022 (by 0.4% in 2021), while the rate of increase in investment in fixed assets slowed to 0.2% from 1.2%, the growth rate of government spending decreased to 1.1% from 3.8%.
Exports of goods from Germany increased by 3.2% last year, and imports increased by 6.7%. Which, by the way, had a negative impact on the country's GDP.
The total deficit of public budgets in Germany in 2022 amounted to 101.631 billion euros (compared to 134.252 billion euros in 2021). Thus, the decrease was 24%.
The negative balance of the federal budget decreased to 117.633 billion euros from 145.925 billion euros.
Throughout 2022, an average of 45.6 million people worked in Germany, which is 589 thousand (1.3%) higher than in the previous year.
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January 17. The price of gas in the EU has dropped to $600/thousand cubic meters
The cost of gas in Europe fell below the level of $600 per thousand cubic meters for the first time since the end of August 2021, against the background of a warm winter and the temperature norm approaching optimal values.
The contract with the delivery «a day ahead» at the TTF hub in the Netherlands dropped to $590 per thousand cubic meters. February futures – up to $615.
Analysts note that the warm weather in October, November and January, as well as cost-saving measures, have led to the fact that at the moment the level of gas reserves in underground gas storage facilities (UGS) is the highest in the history of observations. And this strengthens the confidence of the authorities in the safe passage of winter.
According to Gas Infrastructure Europe (GIE) data from January 15, Europe's UGS are 81.49% full. In addition, gas quotes are affected by high wind power generation rates.
At the same time, Asian quotes remain significantly higher than European ones. In particular, the February futures on the JKM Platts index (Japan Korea Marker, reflecting the spot market value of goods shipped to Japan, South Korea, China and Taiwan) is located at $957.
Recall that on December 19, 2022, the EU countries agreed on a ceiling of gas prices in the amount of 180 euros per 1 MWh, (or $ 1975 per 1000 cubic meters). This price limit will take effect from February 15. The ceiling will be activated if the price of gas for TTF exceeds the agreed mark, and the spread to the price of liquefied natural gas in the EU will be more than 35 euros per 1 MWh. It is worth noting that the price ceiling will not apply to over-the-counter transactions.
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January 19. The share of the pound in international settlements fell to a June low
According to the SWIFT international system, the share of the pound sterling in international settlements by the end of December fell to 6.08%, which was the lowest value since June.
During the month, the British currency lost 1.01 percentage points, while retaining third place in the list of the most popular settlement currencies. The last time when the value was much less than the current one, it was noted in June: then the pound accounted for 5.96% of international settlements.
Analysts note that the dollar and the euro have strengthened their positions in the rating of currencies – they took first and second places with a share of 41.89% and 36.34%, respectively. The «American» for the month grew by 0.51 percentage points, and the «European» — by 0.22 points.
The Japanese yen is still in fourth place at the end of December, the share of which increased by 0.34 percentage points to 2.88% over the month.
The Chinese yuan closes the top five with a share of 2.15% and a decrease of 0.22 percentage points over the month.
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January 23. Retail sales in Britain showed a record drop since 1997
According to the UK Bureau of National Statistics, retail sales in December 2022 decreased by 5.8% compared to the same period in 2021. This was a record drop in the entire history of observations since 1997.
According to the ONS, retail sales in Britain have declined for the second month in a row. In December, they unexpectedly fell by 1%, which is twice as much as the 0.5% predicted by analysts. In November, the drop was also 0.5%.
The State Bureau also reported that the sales volumes recorded in December were 1.7% less than in February 2020 before the outbreak of the coronavirus pandemic. Total retail sales fell by 3% between 2021 and 2022.
Analysts note that after the start of the special operation of the Russian Federation in Ukraine, the West increased sanctions pressure on Russia. As a result, the disruption of logistics chains has led to an increase in fuel and food prices in Europe and the United States. In the UK itself, the rising cost of living has hit millions of households.
Recall that the Bank of England raised the base interest rate by 50 basis points – from 3% to 3.5%. The regulator also announced the beginning of a recession in the country, which will last the whole of 2023 and the first half of 2024. Annual inflation in the UK at the end of December was 10.5%.
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January 25. Microsoft shares fell amid the release of a weak report
Microsoft shares jumped 5.26% to $254.79 in postmarket trading. However, then the dynamics changed, and according to the results of the postmarket, the IT giant's securities fell by 1.02%, to $234.64.
On Tuesday, Microsoft released its financial report for the second fiscal quarter, which ended in December 2022. The company reported a 7% decrease in adjusted net profit to $17.4 billion. Earnings per share (EPS) fell 6% to $2.32. At the same time, analysts predicted EPS at $2.29.
Microsoft's total revenue grew by 2% and reached $52.75 billion, while Wall Street forecast $52.94 billion. This was the lowest increase in quarterly revenue since 2016.
Experts also note that Microsoft is increasingly becoming cloud-based. The share of various kinds of cloud services already accounts for 40% of revenue and more than 40% of operating profit. At the same time, the corporation began to earn less in other segments. Thus, revenues from PC products, including the Microsoft Windows operating system and Office software, decreased by 19% to $14.2 billion.
The corporation also gave a forecast that disappointed investors: it is expected that in the third fiscal quarter revenue will be from $50.5 billion to $51.5 billion, which is about 3% more than a year earlier. Analysts predicted that revenue in the current quarter would be $52.43 billion.
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January 26. Brent crude oil exceeded the level of $87 per barrel
On Thursday, the oil market shows steady growth: Brent quotes rose to the level of $87.50 per barrel. The North American grade of WTI oil is trading today near the level of $81.50 per barrel.
Traders continue to evaluate data on fuel stocks in the United States. According to the report of the Ministry of Energy, commercial oil reserves increased by 533 thousand barrels last week. The growth of reserves was recorded for the fifth week in a row.
Gasoline inventories increased by 1.76 million barrels, while distillate inventories decreased by 507 thousand barrels. Analysts predicted an increase in oil reserves by 1.5 million barrels, an increase in gasoline reserves by 1.5 million barrels and a drop in distillate reserves by 1.6 million barrels.
Experts note that the data of the Ministry of Energy reflected what the market has been putting into quotes in recent weeks: the growing premium of Brent compared to WTI since the end of December leads to an increase in exports, which limits the growth of stocks, despite the weak workload of American refineries.
Investors are also assessing the risks of a recession in the global economy and the prospects for fuel demand in China. Fears of a recession and the weakening of hopes for a «soft landing» for the economy remain negative factors for the market. At the same time, analysts expect that optimism about a sharp recovery in demand in China will support oil quotes in the near future.
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January 27. Central banks are buying gold at the fastest pace in half a century
According to a report by economists of the International Monetary Fund and the University of California at Berkeley, gold not only did not leave the international reserve currency, but also significantly increased its performance, as the gold reserves of the world's central banks increased after the global financial crisis of 2008-2009.
Experts note that in the third quarter of 2022, leading central banks bought more gold than in any other quarter for 55 years. The main buyers at the same time were banks of developing countries, such as Russia, China, India, Turkey, Argentina, Hungary and Belarus.
Among the main reasons for the increase in purchases, analysts note the popularity of gold as a traditional and safe means of saving at a time when a number of countries are subject to financial sanctions.
An interesting fact is that Russia, Iran and other countries that are subject to US sanctions can now combine blockchain technologies with gold to launch a digital currency that can compete with the dollar. Blockchain will allow these countries to make transactions with gold without actually redirecting coins or bullion.
Moreover, gold today is the only significant asset that is not controlled by any country and that cannot be forged. It is also the only asset that largely guarantees financial confidentiality.
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January 30. The main economic events of the day: January 30, 2023
At the end of last week, the dollar managed to finish trading in positive territory, and its DXY index showed a modest increase of about 20 points. Last week, which was the last full trading week of the month, turned out to be extremely volatile and saturated with the publication of important macro statistics.
The current week promises to be no less interesting: meetings of the three largest world central banks (Fed, Bank of England, ECB) are expected at once, at which decisions on rates will be made. Market participants expect an interest rate increase of 0.50% from the ECB and the Bank of England, but only 0.25% from the Fed.
The week will end with the publication of key data from the US labor market: the US Department of Labor will present a monthly Non-Farm Payrolls report with data for January.
The main and only event of Monday, January 30, will be the publication of preliminary data on German GDP for the 4th quarter. Since the German economy is the locomotive of the entire European economy, a high value of the GDP indicator is considered a positive factor for EUR, and a low one is considered a negative factor.
Analysts predict that German GDP growth in the 4th quarter of 2022 amounted to 0%, and in annual terms – 0.8%. The previous values were marked at the levels of 0.4% and 1.2%, respectively. The data is better than the forecast may strengthen the euro in the short term.
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February 1. Experts predict an increase in ECB rates by 50 bps
Tomorrow, February 2, the first meeting of the European Central Bank in 2023 on the rate will be held. Market participants are confident that the ECB will raise key interest rates by 50 basis points, to the highest since 2008.
If the market forecasts come true, the base interest rate on loans will be raised to 3%, the deposit rate to 2.5%, and the rate on margin loans to 3.25%. At the previous meeting, the ECB increased all three rates by 50 bps. In total, they were raised by 250 bps in 2022.
Following the results of the December meeting, the head of the central bank, Christine Lagarde, said that the regulator intends to continue raising rates at a rate of 50 bps, and already in January, some representatives of the Central Bank confirmed the relevance of these plans. Now the main question for investors is whether the ECB will continue to increase rates by 50 bps in March, or will consider it necessary to slow down the pace of their increase.
It is worth noting that the European regulator usually makes a decision on rates not in advance, but directly at each meeting, taking into account the emerging data.
Today, data on inflation in the eurozone were published, according to which the growth rate of consumer prices in January slowed significantly – to 8.5% in annual terms (from 9.2% in December). This indicator has become the lowest since May last year, but it still significantly exceeds the ECB's 2% target.
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February 6. Oil has stabilized after a sharp drop last week
At the end of last week, oil prices showed a sharp drop from the level of $84 per barrel to $79.70. On Monday, Brent managed to stabilize, settling within the narrow sideways range of $80.00-$80.30 per barrel.
North American WTI oil shows similar dynamics: the current quote of the asset is $73.60 per barrel. Last Friday, WTI was trading at $77.75. At the end of last week, Brent fell by 7.5%, WTI – by 7.9%.
Pressure on the market was exerted by the weakening of investor optimism about the growth rate of demand in China after the lifting of anti-bullying restrictions, as well as strong data on the labor market of the United States. According to the report of the US Department of Labor, the number of people employed in the non-agricultural sector increased by 517 thousand, which is significantly higher than the forecast of 187 thousand and December growth of 260 thousand.
At the same time, the unemployment rate fell to the lowest since 1969 (3.4%). Data from the US Ministry of Labor showed that the Federal Reserve System still has room for maneuver in terms of tightening monetary policy.
Additional pressure on oil quotes was exerted by the statement of the head of the International Energy Agency that the economic recovery in China after the rejection of strict quarantine measures may be more powerful than expected. According to the IEA forecast, the Chinese economy will account for about half of the growth in oil demand this year.
It is also worth recalling that on February 5, the decision of the European Union and the G7 to impose an embargo on the import of petroleum products from Russia came into force. Market participants are closely monitoring the consequences of these measures.
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February 8. The oil market is on the rise in the middle of the week
Oil quotes accelerated growth on Wednesday amid hopes for a recovery in demand in China and fears of supply disruptions due to earthquakes in Turkey.
In addition, risky assets, including oil, were supported by statements made yesterday by the head of the US Federal Reserve System Jerome Powell, which turned out to be not as «hawkish» as the market expected.
The current price of Brent crude oil is $84.80 per barrel. Yesterday, the asset quotes were located at $81.60 per barrel. North American WTI crude is trading near $78.30 after yesterday's decline to $74.80 per barrel.
Additional support for the oil market is provided by the words of the head of the International Energy Agency, Fatih Birol, that the recovery of China's economy may proceed at a more active pace than expected. And this, in turn, will lead to a global increase in demand for oil and natural gas.
Today, data from the US Department of Energy on crude oil reserves in the country will have an impact on the market. Analysts predict an increase in oil reserves by about 2.5 million barrels. Yesterday's report from the American Petroleum Institute (API) indicated a reduction in reserves in the United States by 2.18 million barrels per week.
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February 15. The Floki token rate jumped by 46% after Elon Musk's tweet
The Floki token (FLOKI) exchange rate increased by 46% after the head of Tesla and SpaceX, Elon Musk, published photos of his Shiba Inu dog named Floki.
On February 15, the billionaire posted a photo of his pet on the social network and called him the new CEO of Twitter, noting that Floki is well versed in numbers. «The new CEO of Twitter is amazing,» the billionaire wrote.
As a result, Floki – the management token in the ecosystem of the same name, which includes the gaming metaverse, the NFT marketplace, the FlokiFi DeFi project and the educational crypto platform – has sharply jumped in price.
Other meme «dog» cryptocurrencies also reacted with a slight increase. Dogecoin has risen in price by 6% over the past day, Shiba Inu – by 4.5%.
Elon Musk announced that he will name his puppy Shiba inu Floki on June 25, 2021. Then the billionaire's tweet caused the Shiba Inu cryptocurrency quotes to rise by 9%. In December of the same year, after the billionaire published a photo of Floki, the value of the Santa Floki token increased by 4000%, but since then it has fallen to zero values.
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March 1. Oil began to decline on signals of rising stocks in the US
On the first day of March, oil quotes began to decline after the release of data from the American Petroleum Institute (API) on another increase in fuel reserves in the United States.
The price of Brent crude oil fell from the level of $84.10 to $82.70 per barrel. North American WTI oil shows similar dynamics: a decline to $76.20 after yesterday's growth to $77.65 per barrel.
According to API statistics, crude oil inventories in the United States increased by 6.2 million barrels last week. Today, we should pay attention to similar data from the US Department of Energy. Analysts assume that the official report will indicate an increase in reserves by about 500 thousand barrels.
Yesterday, oil showed strengthening amid optimism about the recovery of the Chinese economy. In particular, the Purchasing managers' Index (PMI) in the processing industry of China rose in February to 52.6 points (from 50.1 points a month earlier), reaching a record high since 2012. Analysts on average expected a more moderate increase, up to 50.5 points.
The PMI of the service sector in February rose to 56.3 points from 54.4 points in January. The indicator has updated the maximum since March 2021.
February 28. The IMF refused to ban cryptocurrencies
The International Monetary Fund intends to abandon the idea of a complete ban on cryptocurrencies. This was stated by the Managing Director of the IMF Kristalina Georgieva during her speech at the meeting of G20 finance ministers in Bangalore, India.
Instead of a ban, the fund plans to differentiate and regulate crypto assets. «We are in favor of regulating the world of digital money, and this is a top priority, despite the fact that there is still a lot of confusion in the classification of digital money,» Georgieva said.
To date, the IMF's first goal is to distinguish between government-backed digital currencies of central banks and publicly issued crypto assets and stablecoins.
The head of the fund also stated that fully secured stablecoins create a fairly good space for the economy, and unsecured crypto assets are speculative and high-risk assets that require more regulation. The IMF still believes that crypto assets cannot be legal tender, since they are not secured by anything.
Moreover, if states fail to develop a mechanism to combat money laundering through cryptocurrencies and protect investors, the IMF does not rule out a complete ban on the use of an innovative tool in the global economy.
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March 6. Gold is declining in anticipation of the speech of the Fed’s head
On Monday, gold prices are mostly declining, moving away from the maximum in 2.5 weeks. Pressure on the precious metal is exerted by expectations of the speech of the head of the US Federal Reserve System Jerome Powell, which will take place later this week. Market participants hope to clarify the prospects of the central bank's monetary policy.
The current quote of gold paired with the dollar is $1856.45. During the day, the asset fell from the level of $1863 to $1854 per troy ounce. At the same time, the dollar index increased by 0.1%, making dollar-denominated gold more expensive for holders of other currencies.
In addition to Powell's speech, investors are waiting for Friday's data on the US labor market. At the end of the week, the monthly Non-Farm Payrolls report on the number of new jobs in the non-agricultural sector will be published. A weaker than expected indicator will indicate that the US Federal Reserve rate will not rise too rapidly, and this will support gold.
Spot silver prices declined to the level of $21.17, recovering during the day to the current level of $21.23 per ounce. Platinum fell by 1% to $968.09, and palladium fell in price by 1.8% to $1,426 per ounce.
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March 17. Economists recorded a peak drop in oil amid banking turmoil
Analyzing the dynamics of oil prices in recent days, economists have come to the conclusion that oil has suffered the biggest losses in a week this year. The drop in raw materials is mainly due to significant shocks in the world markets in the banking sector.
Recall that on March 11, the 16th largest US bank Silicon Valley Bank (SVB) was declared bankrupt. The bankruptcy of this major Silicon Valley bank was the second largest in U.S. history after Washington Mutual Bank, whose collapse in 2008 led to a drop in stock prices in Europe and the closure of another bank in the United States.
Today, futures for North American WTI crude oil fell below $68 per barrel. At the end of the week, the drop was about 10%. The current price of the asset is $67.17 per barrel. Brent oil is also showing a decline – to the level of $73.40 per barrel.
Market participants are waiting for a reaction to the current collapse in prices from OPEC+. However, there is an opinion that the cartel will not take any action until the price of Brent crude oil falls below $70 per barrel for a long period of time.
At the same time, the International Energy Agency predicts that the oil market will be in surplus in the first half of 2023, despite the reduction in oil production in Russia in March. The European Union expects that the average price of Brent crude oil this year will be $84.8 per barrel.
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April 17. The oil market is unstable at the beginning of a new trading week
Oil quotes show high volatility at the beginning of the new trading week in the price range of $85.65-86.50 per barrel.
The current Brent quote is $85.67 per barrel, WTI oil is trading in the range of $81.70-82.60 per barrel. Last week, Brent rose by 1.4%, WTI – by 2.3%, and both types of oil rose in price for the fourth week in a row.
The market was supported by the forecast of the International Energy Agency published on Friday, according to which the supply deficit on the world market in the third quarter will amount to 2 million barrels per day. The IEA noted that another reduction in production by OPEC+ countries threatens a further decline in supply and an increase in oil prices at a time when inflationary pressure is already damaging consumers.
In the second quarter, the deficit will be 400 thousand b/d. Previously, the IEA expected demand to exceed supply only in the third quarter. The average deficit in 2023 is estimated at 800 thousand b/d.
At the same time, OPEC, which published its monthly forecast the day before the IEA, still expects an increase in oil demand in 2023 by 2.3 million barrels per day (up to 101.89 million b/d) – above the pre-Covid level.
Also today it became known that the countries of G7 intend to maintain the ceiling of prices for Russian oil at $60 per barrel.
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April 24. Binance allowed deposits with Russian cards
The Binance crypto exchange has returned to users from Russia the opportunity to replenish deposits using Qiwi wallets and Russian bank cards.
The Binance support service states: «You can make a deposit on our platform using a Russian card via Qiwi. At the same time, all Visa, Mastercard and other cards issued in Russia are supported.»
Among the currencies that can be used to replenish the deposit, rubles, Turkish lira, British pounds, euros, Kazakhstani tenge, Australian dollar, Ukrainian hryvnia, Czech crown and a number of others are offered. At the same time, there is no US dollar.
Recall that in March last year, against the background of events in Ukraine, the crypto exchange announced the suspension of operations using Mastercard and Visa bank cards issued in Russia. In 2023, Binance also banned Russian citizens and persons residing in the country from making transactions with dollars and euros through the money transfer service between individuals (P2P) in connection with the tenth package of sanctions adopted by the EU.
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May 5. Apple's profit in the first half of the year fell by 9%
The manufacturer of phones and smart devices Apple has presented a profit report in the first half of the 2022-2023 fiscal year, which ended on April 1.
The company's net profit decreased by 9% year-on-year and reached $54.158 billion. Diluted earnings per share were $3.41 compared to $3.62 a year earlier. The company's revenue for the reporting period increased by 4% to $211.99 billion.
In the second quarter of fiscal year 2022-2023, Apple's net profit decreased by 3.4% to $24.16 billion. Diluted earnings per share were $1.52, the same as a year earlier. The company's revenue for the reporting period decreased by 2.5% to $94.836 billion.
At the same time, revenue from iPhone sales in the second quarter increased by 1.5% y/y and amounted to $51.334 billion, Mac – decreased by 31.3% to $7.4168 billion, iPad – by 12% to $6.67 billion.
Sales of devices in the Wearables, Home and Accessories segment (which includes Apple Watch and AirPods) showed a decrease of 0.6% to $8.757 billion, and sales of the Services division rose by 5.5% to $20.907 billion.
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May 17. The pound remains under pressure after the speech of the head of the Bank of England
The British pound sterling has been showing a significant drop in recent days in a pair with the US dollar, falling to the level of 1.2422. On Wednesday, after a speech by the governor of the Bank of England, Andrew Bailey, who said that the central bank expects price pressure to ease in April, the pound remains under pressure.
Speaking at the annual world conference at the UK Chamber of Commerce, Bailey said that if price pressures prove more sustainable, further policy tightening will be required. At the same time, he added that there were signs of some weakening of the labor market.
Yesterday, data on unemployment in the UK were published: it rose to 3.9%. However, the growth rate of wages, including bonuses, remained unchanged, and this forced market participants to moderate expectations for further rate increases.
The current quote of the GBP/USD pair is 1.2477. The EUR/GBP pair also shows a drop during the day – to the level of 0.8677.
The Bank of England began tightening monetary policy at the end of 2021. Since then, the British central bank has raised its key interest rate by 400 basis points in total. However, to date, market opinions regarding the next step of the central bank are divided.
Thus, the probability of a rate hike at the June meeting of the Bank of England by 25 basis points is 66%. Analysts note that the further steps of the regulator will depend on the incoming macroeconomic data, while the inflation report for April, which is expected next week, will be important.
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May 30. Food inflation in the UK has fallen for the first time in two years
According to the British Retail Consortium (BRC), food inflation in Great Britain fell for the first time in two years from a record 15.7% in April to 15.4% in May. The last time the indicator decreased was in August 2021.
Analysts note that the reason for the decline was the fall in electricity prices and the cost of production costs.
According to the BRC, price inflation for canned food rose to 13.1% from 12.9% in April, and for perishable products – fell from 17.8% to 17.2%.
At the same time, the consumer price index presented by BRC increased by 0.2% compared to April – up to 9% – due to the low exchange rate of the pound, increased labor costs, as well as electricity bills for stores.
Earlier, the National Statistical Service of Great Britain reported that real incomes of the population continue to fall at the fastest pace in ten years against the background of the inflation rate exceeding the increase in wages. As a result of record inflation, there is a wave of strikes in the country – employees of railway companies, lawyers, airport employees, postmen and workers in other fields come out to protest.
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June 16. Natural gas prices in Europe jumped by 30% due to the closure of the field
Natural gas prices in Europe have soared by 30% due to the closure of the largest Groningen gas field in the Netherlands. This decision was made after a series of earthquakes that damaged thousands of homes.
Although a final decision has not yet been made, the official closure of the field is expected after a government meeting at the end of June. This deposit is the oldest in the country and it has been in operation for 60 years.
This news caused a significant increase in gas futures prices, and then prices stabilized and rose by 10%, reaching 42.16 euros per megawatt hour.
The closure of Groningen is due to frequent earthquakes caused by gas extraction, which have led to the destruction of thousands of homes in the region since the 1980s. Plans to close the field were accelerated after a vote of no confidence in Prime Minister Mark Rutte and accusations of an ineffective government response to the problems.
The Groningen field will operate at minimum levels until the final closure and about 2.8 billion cubic meters of gas will still be produced.
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September 8. German inflation slowed to 6.4% in August
According to the final data of the German Federal Statistical Office, in August consumer prices that meet European Union standards increased by 6.4% compared to the same period last year.
Thus, inflation slowed down from 6.5% in July. The result corresponds to the preliminary assessment and forecasts of experts.
On a monthly basis, prices for consumer goods and services increased by 0.4%, after an increase of 0.5% in July.
Inflation, calculated only by German standards, also slowed down – in August the indicator fell to 6.1% y/y from 6.2% in July. This was the minimum growth in the last three months.
The cost of energy in Germany accelerated its growth to 8.3% from 5.7%. The cost of food increased by 9% (in July – by 11%).
Core inflation, excluding volatile energy and food prices, remained stable and amounted to 5.5% y/y in August, remaining at the level of the previous month.
Preliminary data on the dynamics of inflation in Germany in September will be published on September 28.
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September 11. Oil market news
On Monday morning, oil prices remain stable in the area above $90 per barrel.
The current quotation of Brent crude oil is $90.30. The maximum reached at the end of last week is $90.83. North American WTI oil shows similar dynamics: the current price is $86.97 per barrel, Friday's maximum is $87.75.
These marks were the highest since November last year. Over the past week, prices for Brent rose by 2.4%, and for WTI – by 2.3%.
The current slight decline in prices is probably a technical correction. Although the oil market is still under pressure from concerns related to the slowdown in economic growth in China.
China returned to inflation in August, but the growth rate was slower than expected. Consumer prices (CPI index) in the country last month increased by 0.1% in annual terms, which was below the average analysts' expectations of 0.2%. In July, the decline was 0.3%.
This week, attention should be paid to the publication of OPEC's monthly report on the oil market, which is scheduled for Tuesday. And on Wednesday, the US Department of Energy will present a weekly report on crude oil reserves in the country.
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The main events by the morning: March 21
The Fed kept its key rate at 5.5%. Jerome Powell said that a rate hike could stifle the country's economy and budget due to rising public debt costs. At the same time, inflationary pressures are still too high to mitigate monetary policy.
The US dollar is getting cheaper after the Fed meeting, which did not bring surprises to the market. The Fed's forecasts for 2025 suggest only three rate cuts instead of the previously expected four, which somewhat reduces the prospects for the dollar and highlights uncertainty in the US economic future, including the risk of continued inflation.
There are more and more problems with the supply of Russian oil to India. Reliance, India's largest energy company, has stopped accepting Sovcomflot tankers with oil on board due to fears of secondary sanctions. The company requires a change of the carrier.
German companies are concerned that the EU is losing its attractiveness for doing business. More than half of the surveyed German entrepreneurs (56%) noted a decrease in the attractiveness of the EU as a business platform over the past 5 years, while only 7% of executives see the situation in a positive light. The main reasons were the growing bureaucracy and trade restrictions.
Japan is demonstrating a reduction in trade with Russia. In February, total exports from Japan to Russia decreased by 33.6%, while imports from Russia fell by 10.2%. Nevertheless, there is an increase in certain sectors: LNG supplies from Russia increased by 8%, fish and fish products – by 9%, Japanese motorcycles to Russia – by 13.2%.
The U.S. Department of Justice is preparing to file a new antitrust lawsuit against Apple. This time, the company is accused of restricting access to iPhone hardware features. This case will be the third time in the last 14 years that the agency is suing the tech giant, which may be part of a broader Biden administration campaign against the dominance of large technology companies in the United States.
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The price of gold continues to break records
Gold, which ended trading at a historic high on Thursday, continues to rise on Monday amid expectations of interest rate cuts by the Federal Reserve. On Friday, due to Easter, the exchanges of the United States and many European countries were closed.
The price of June gold contracts at the close of trading on the New York Comex exchange on Thursday was $2,238.4 per ounce. On Monday, the futures price rose 1.8% to reach $2,286.35. In March, the price of gold increased by 8.9%, and for the entire first quarter – by 8%.
Analysts note that the unprecedented rally in gold was caused by softer inflation data in the United States, which increased expectations of a Fed interest rate cut in June. The consumer price index (PCE) in the United States in February increased by 0.3% compared to the previous month, which was lower than analysts' expectations, who predicted an inflation rate of 0.4%.
Markets estimate the probability of a Fed base rate cut in June at about 70%, and also expect that by the end of 2024 it will decrease by 75 basis points from the current level of 5.25-5.5% per annum.
As you know, lower interest rates create a favorable environment for gold, increasing its attractiveness as an investment asset. Gold investors act with confidence that the Fed will prefer to lower interest rates regardless of whether inflation reaches the target level.
More news on our website: https://bit.ly/4a81506
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Oil prices are on the rise due to the situation in the Middle East
Oil prices rose slightly on Monday after the strongest weekly drop in seven months. Brent quotes rose to $83.70 per barrel. North American WTI crude is trading near $79.00.
This came amid growing signs that recent cease-fire talks between Israel and Hamas have not made significant progress. The media reported that the last round of negotiations ended without reaching an agreement. This happened after the Israeli strike on Rafah, which killed at least 10 people.
The ongoing conflict increases expectations of geopolitical unrest in the Middle East, which may lead to a reduction in oil supplies from this region.
However, further growth in oil prices is limited by the prospect of weaker demand and reduced supplies this year. These factors also contributed to the sharp decline in oil prices last week. High interest rates and inflation are expected to remain factors putting pressure on the global economy this year, which could undermine oil demand.
Recent data on the growth of oil production in the United States to record levels and an increase in oil reserves have also affected oil prices, raising fears that OPEC and its allies may not extend production cuts until the end of June.
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The main events by the morning: May 7
The EU is considering trade sanctions against Israel due to the policy of aggressive war in the Gaza Strip. Belgium proposed the initiative. And although Belgium had already decided on its own to impose sanctions a few weeks ago, the country's Prime Minister, Alexander De Croo, stressed that a collective approach from the entire alliance was needed.
Brussels has announced that the EU ambassador will not attend Vladimir Putin's inauguration on May 7. The authorities of Poland, the United States, Canada and the United Kingdom also announced their refusal to send their representatives to participate in the ceremony.
SberPay launched in Turkey. To use this service, you must inform Sber at the time of purchase that you want to pay through the Metropol system and then go to the website payinturkey.com.
The European Union plans to impose sanctions against the Russian version of SWIFT as part of the 14th package of sanctions.
The demand for workers who speak Chinese increased by 63% in 2024. Proficiency in Chinese at a fluent/conversational level increases the average earnings of a specialist by 18-20%. Chinese is the second most popular language after English.
The EU countries have reached a consensus on the use of proceeds from frozen Russian assets. German Chancellor Olaf Scholz announced the readiness of the EU countries to direct 90% of all profits to the military needs of Ukraine.