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August 14th - According to foreign media reports, economists are now worried that the persistent high temperatures and lack of rainfall will increasingly drag down British economic activity. Currently, about two-thirds of England has officially entered a drought state, and newly appointed Prime Minister Andy Burnham convened an emergency meeting this week to discuss government measures to deal with the drought and wildfires. Increasing signs indicate that extreme heat is driving consumers away from high streets, impacting agricultural production, hindering construction, and dragging down labor productivity. An analysis by an agency on Friday showed that, so far, the heatwave has caused approximately £6 billion in losses to the British economy, equivalent to 0.2% of economic output. An economist stated, "The hot summer has brought yet another negative supply shock to the British economy. While the impact of the heatwave on GDP levels may only be temporary, the risk is that this heatwave could again push up prices in some sectors, thus creating new challenges for the Bank of England, which is already dealing with high inflation."A NATO military spokesperson stated that, following confirmation, an Italian Typhoon fighter jet eliminated the potential threat over an uninhabited area (regarding the earlier drone incident in Latvia).A NATO military spokesperson confirmed that NATO allied warplanes were scrambled due to a drone entering Latvian airspace.On Friday, August 14th, the German DAX 30 index opened 165.71 points higher, or 0.63%, at 26457.71; the UK FTSE 100 index opened 9.07 points higher, or 0.08%, at 10781.74; the French CAC 40 index opened 3.95 points higher, or 0.05%, at 8654.51; the Euro Stoxx 50 index opened 14.68 points higher, or 0.22%, at 6560.15; the Spanish IBEX 35 index opened 24.87 points higher, or 0.12%, at 20193.47; and the Italian FTSE MIB index opened 18.73 points higher, or 0.03%, at 53712.00.As of 15:00 Beijing time, spot platinum rose 0.02%, while spot palladium fell 0.47%.

Asian Shares Fall As Investors Analyze ECB Decisions

Charlie Brooks

Jun 10, 2022 11:14

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Asia-Pacific equities were predominantly lower on Friday morning. Ahead of U.S. inflation statistics, investors are analyzing the European Central Bank's signals for potential interest rate hikes.


At 10:49 PM ET (2:49 AM GMT), the Nikkei 225 was down 1.41 percent, and the KOSPI was down 1.08 percent.


In Australia, the ASX 200 index declined 0.99%.


The Hang Seng Index in Hong Kong fell 0.89 percent.


As a result of the Chinese government's response to a Bloomberg article, the sub-index for Hong Kong-listed IT giants opened 2.9 percent lower. Alibaba (NYSE:BABA) Group Holding Ltd.'s U.S.-listed shares plummeted after the China Securities Regulatory Commission dismissed a Bloomberg report that it was exploring a listing resurrection for the fintech company.


The Shanghai Composite rose 0.10 percent, but the Shenzhen Component rose 0.02 percent.


China's manufacturing factory-gate inflation slowed to its worst pace in 14 months in May, according to previously released data. In May, the producer pricing index (PPI) increased by 6.4% annually, compared to an increase of 8% in April. The reading was the lowest since March 2021. The cooling could be attributable to decreased demand for steel, aluminum, and other industrial commodities as a result of COVID-19-related production disruptions.


Meanwhile, the consumer price index (CPI) increased 2.1% annually.


The European Central Bank (ECB) announced on Thursday that it will prepare a quarter-point increase in interest rates in July and a larger increase in the fall if inflation remains high. Inflation in the eurozone has already surpassed 8 percent.


Short-term U.S. Treasury rates are near all-time highs for 2022 due to a selloff in the euro-area bond market in response to ECB rate rise indications.


The ECB also announced that net asset purchases will halt on July 1, 2022.


Now, investors have moved their attention to U.S. inflation data, due later in the day, for additional hints on the course of interest rate hikes by the U.S. Federal Reserve.


Bloomberg quoted Charles Schwab (NYSE:SCHW) & Co.'s chief financial strategist Liz Ann Sonders as saying, "We've reestablished the inverse relationship between bond rates and stock prices."


"There is a little more discussion, or whispering, about the CPI being a touch above forecasts. Add to that the ECB's more hawkish posture, and you get another bad day."


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