25 minutes ago
Fitch’s downgrade pushes Pakistan’s debt rating further into junk territory
Rating agency Fitch cut Pakistan’s long-term foreign currency issuer default rating from CCC+ to CCC-, pushing it further into junk territory.
According to its rating scale, ratings from CCC indicate “a very high risk of default compared to other issuers or debt obligations in the same country or in the same currency union”.
The Fitch report cited factors including a sharp deterioration in external liquidity and financing conditions, foreign exchange reserves falling to critically low levels and large refinancing risks for Pakistan.
However, the report also noted that the country is committed to servicing its debt, adding that Prime Minister Shehbaz Sharif has also expressed intentions to honor all debt obligations.
— Lim Hui Jie
Before an hour
Fortescue shares fall after the company reports lower half-year earnings and dividends
Shares in Australian company Fortescue Metals fell 1.13% on Wednesday after the company reported lower earnings and dividends for the June-December 2022 period and pointed to persistent inflationary pressures.
Meanwhile, the company said it expects solid iron ore demand from China this year.
Net income after tax was $2.36 million, down 15% from the $2.78 million for the same period last year.
Dividends also fell to 76 Australian cents, down 13% from the 85 Australian cents it paid out for the June-December 2021 period.
— Lim Hui Jie
Before an hour
Gold prices could climb above $2,000 by the end of 2023, says UBS
Gold prices could surpass $2,000 by the end of the year on a weakening US dollar, said Wayne Gordon, commodities, rates and currencies analyst at UBS Global Wealth Management.
“We believe the dollar is in trend weakness now heading into 2024. And in that context, gold has been and still is a very good hedge against this dollar weakness,” Gordon told CNBC’s Squawk Box Asia. On Wednesday.
To push gold to “new record levels” of $2,100 and above, the Federal Reserve must start cutting interest rates, he said, adding that the Fed could turn dovish in the third quarter and cut rates by year-end.
Gold prices stood at $1,856.30 during the Asian afternoon trading session.
– Charmaine Jacob
Before an hour
Singapore faces a ‘tricky balancing act’ with inflation and a weak fiscal position: Lawrence Wong
Setting Singapore’s budget this year is “particularly challenging” as it is “a very delicate balancing act,” Deputy Prime Minister Lawrence Wong said in an exclusive interview with CNBC.
Singapore’s weak fiscal position along with citizens wanting support when the cost of living rises are some of the stresses the country is facing, said Wong, also the country’s chief financial officer.
He said Singapore’s economy, while recovering to pre-Covid levels, is “still quite weak”. But rising costs also mean Singaporeans want more action to deal with inflation, he said.
The Straits Times Index fell 0.9%, while DBS Bank and OCBC Bank were down 0.86% and 1.08%, respectively, as of 12:00 p.m. local time on Wednesday.
To support households and businesses, the government pledged an additional S$3 billion (US$2.26 billion) on Tuesday, on top of the previous S$8 billion support package in 2022.
– Sheila Chiang
2 hours ago
China leaves interest rates on medium-term loans unchanged at 2.75%
The People’s Bank of China kept interest rates unchanged at 2.75% on 499 billion yuan of one-year medium-term credit facilities.
In a statement, the People’s Bank of China said this is to “properly keep the liquidity of the banking system at an appropriate level,” adding that it fully meets the needs of financial institutions.
The yuan weakened slightly against the US dollar, trading at 6.84.
— Lim Hui Jie
3 hours ago
The Hong Kong benchmark index was dragged down by consumers and healthcare
Consumer and healthcare stocks led the Hang Seng Index declines.
ANTA Sports Products fell 4.5%, Alibaba Health Information Technology lost 4.2% and Hansoh Pharmaceutical Group lost 3.4% in the first hours of trading.
Country Garden Services Holdings was also down almost 5%.
The HSI hovered around its lowest level since early January after falling nearly 5% month-to-date.
4 hours ago
Australian banks fall as RBA governor repeatedly confirms inflation is too high
Australian bank shares fell as Reserve Bank of Australia Governor Philip Lowe stressed that inflation remains at elevated levels when addressing the Senate Economics Legislation Committee.
“Inflation is currently far too high at 7.8%, it needs to be brought down,” he said, adding that the CPI is the central bank’s “primary consideration”.
Commonwealth Bank of Australia shares traded 5.8% lower, Westpac Banking Corp lost 4.6%, National Australia Bank fell 4.7%.
– Jihye Lee
4 hours ago
TSMC shares tumble after Warren Buffett reduced holdings last quarter
5 hours before
South Korea’s unemployment rate falls slightly
South Korea’s unemployment rate fell to 2.9% in January, government data showed, from 3.3% in December.
The economy added 411,000 new jobs for the month year-on-year, up 1.5% on a yearly basis.
– Jihye Lee
5 hours before
Japan’s TEPCO receives $3 billion in emergency loans from top lender: Nikkei
Ten Japanese financial institutions are preparing to issue 400 billion yen ($3.01 billion) in emergency loans to Tokyo Electric Power (TEPCO), the Nikkei reported.
Lenders include banks like Sumitomo Mitsui Banking Corp and Mizuho Bank amid high fuel costs and a weak yen that has hit the country’s utilities sector.
Nikkei said the plan is still being finalized, but it includes about 90 billion yen from the state-backed Japan Development Bank, 83 billion yen from Sumitomo Mitsui Banking, 62 billion yen from Mizuho Bank and 39 billion yen from Nippon Life Insurance.
TEPCO could receive the loans as early as April.
Shares of TEPCO traded 0.65% lower, while shares of Sumitomo Mitsui Financial Group – which owns SMBC – rose 0.94% and shares of Mizuho Bank rose 1.11%.
6 hours ago
Samsung Electronics flat after announcing it will borrow $16 billion from SDI
Samsung Electronics’ shares were little changed after it announced plans in a filing to borrow 20 trillion won ($15.78 billion) from its subsidiary Samsung Display.
The share price fell 0.16% in the first hour of trading from Seoul, paring some of the gains made in the previous session.
Samsung said the amount will be used as working capital and plans to borrow the funds at an interest rate of 4.60%.
– Jihye Lee
5 hours before
CNBC Pro: BofA says these global stocks can weather a choppy market — and are “inexpensive” to boot
5 hours before
CNBC Pro: This fund manager says a bull market could be on the horizon — and shares her top stock picks
US equity indices are posting smaller gains this month as market sentiment turns bearish. But fund manager Barbara Doran takes a different view, urging investors to “ignore the noise.”
Pro subscribers can read more here.
– Zavier Ong
17 hours ago
US inflation rose slightly more than expected in January
The consumer price index, a closely watched indicator of inflation, rose slightly more than expected last month, thanks in part to rising gas and fuel prices.
The index rose 0.5% month-on-month for a 6.4% gain for the year. Economists polled by Dow Jones had expected corresponding increases of 0.4% and 6.2%, respectively.
Excluding fluctuating food and energy, core CPI rose 0.4% monthly and 5.6% year-on-year, versus estimates of 0.3% and 5.5% respectively.
December’s figure was also revised to a 0.1% gain. The BLS originally reported a 0.1% decline.
Before the number was released, JPMorgan’s trading desk forecast that a 6.4% to 6.5% annual gain would trigger an S&P 500 loss of about 1.5% on Tuesday.
So far, stock futures have weathered the number well. The number beat worst fears of an annual rise of 6.5% or more, an acceleration in inflation that would have triggered a 2.5% decline in the S&P 500, JPMorgan predicted.
– Jeff Cox
12 hours ago
Wharton’s Jeremy Siegel expects the Fed to cut rates even after the latest inflation report
Despite persistently high inflation, the Federal Reserve is likely to cut interest rates later this year, according to Jeremy Siegel, finance professor at the University of Pennsylvania’s Wharton School.
Although the CPI rose 6.4% in January — well above the Fed’s 2% target rate — Siegel said the Fed’s recent rate hikes have already had an impact on prices, noting that it’s only 11 months since has been since the Fed started its course rate is rising.
“Milton Friedman said 12 to 18 months before you can make an impact on prices,” Siegel said on CNBC’s Halftime Report Tuesday afternoon. “We’ve had a lot of impact on prices in the first 12 months… It’s certainly a long process. And it’s a process that the Fed needs to see through the market.”
To be safe, the finance professor added that he was less certain of a rate hike after January’s “incredible” job report.
“I see a stronger economy than four weeks ago,” Siegel said. “More likely, that would mean that the Fed would not cut interest rates so quickly in the second half of the year.
However, he believes the chances of a rate hike remain more likely than not.
“I still think it’s likely. More than 50% that they’re going to cut. Maybe I thought it was 80%, maybe now I think it’s 50%.
He added: “I don’t think anyone, including the Fed, knows because they plan their hike or cut policy 10-14 days in advance. Anything further out is totally data dependent – what they see.”
— Hakyung Kim
11 hours ago
Investors should expect the Fed to continue rising from here
Although the January CPI report showed inflation slowing over the year, that probably wasn’t enough to change the Federal Reserve’s rate-hike stance, according to Anthony Saglimbene, chief markets strategist at Ameriprise.
He said investors should expect the central bank to continue raising rates from here, although it’s not what traders were hoping for.
“The market still doesn’t believe that Mr. Powell and the company don’t need to cut rates this year,” he said. “And that’s because investors fear growth could slow significantly by the end of the year and are pressuring the Fed to ease policy to support the economy.”
Still, “the jury is still out on that outlook,” he said, adding that this scenario could increase risk to asset prices.
“In short, the mixed dynamics surrounding interest rates, monetary policy and the growth outlook last week caused traders to take a breath and set aside some of their chips ahead of this week’s CPI report,” he said.
– Carmen Reinicke
11 hours ago
Fed’s John Williams notes progress on inflation and promises to ‘stay the course’
New York Federal Reserve Chairman John Williams on Tuesday expressed confidence in progress made in fighting inflation, although he said the central bank’s work is still ongoing.
“In terms of monetary policy, we need to restore balance to the economy and bring inflation down to 2% on a sustainable basis,” Williams told a group of bankers gathered in New York. “I am confident that monetary policy will continue to move in a way that brings inflation down to 2%. We will stay the course until our job is done.”
He pointed to several factors complicating the inflation struggle, such as rebounding economic growth in Europe and China. He also noted that following progress in unblocking global supply chains, supply chains have stagnated in recent months.
Services other than food, energy and shelter, or “super-core” inflation, also remained elevated.
“So our work is not done yet. Inflation is still well above our 2% target and it is critical that we reach that target,” Williams said.
– Jeff Cox
