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Asian markets follow Wall St plunge on inflation woes



Markets tumbled in Asia on Monday and the dollar rallied as part of a global rout fuelled by a forecast-beating US inflation print
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Markets tumbled in Asia on Monday and the dollar rallied as part of a global rout fuelled by a forecast-beating US inflation print that ramped up bets on a more aggressive campaign of Federal Reserve interest rate hikes.

Fresh Covid outbreaks in Shanghai and Beijing have also seen authorities reimpose containment measures soon after lifting them, leading to fears about the world’s number two economy.

The possibility of more restrictions in China’s biggest cities also weighed on oil prices, with concerns about a possible US recession and the stronger dollar adding to downward pressure on the black gold.

Investors were left surprised Friday when data showed US inflation jumped 8.6 percent in May, the fastest pace since December 1981, as the Ukraine war and China’s lockdowns pushed energy and food prices.

The reading has led to fervent speculation that the Fed will now be contemplating a 75 basis point lift in interest rates at some point, though it is still expected to stick to a flagged half-point hike when it meets this week.

With the central bank forced to be more aggressive, there is a concern that the US economy could be sent into recession next year.

“For the last few weeks, there has been a cautious calm in markets — rates not pricing anything unforeseen, and equities able to make small gains,” said SPI Asset Management’s Stephen Innes.

“But the strength of (US consumer prices) completely upended that apple cart.

“The market is now thinking much more about the Fed driving rates sharply higher to get on top of inflation and then having to cut back as growth drops.”

And Bank of Singapore chief economist Mansoor Mohi-uddin added that officials would likely lift borrowing costs 50 basis points for the next four meetings and eventually push the overall rate to 4.0 percent in 2023. 

Wall Street’s three main indexes tanked, with the Nasdaq taking the heaviest blow as tech firms — which are susceptible to higher rates — were battered, while European markets were also hammered.

Asia followed suit, with Hong Kong, Tokyo, Seoul, Taipei and Wellington off more than two percent, while Shanghai, Singapore, Manila and Jakarta fared almost as badly.

Goldman Sachs analysts said in a note: “At some point financial conditions will tighten enough and/or growth will weaken enough such that the Fed can pause from hiking.

“But we still seem far from that point, which suggests upside risks to bond yields, ongoing pressure on risky assets, and likely broad US dollar strength for now.”

The dollar continued to push higher on expectations for a sharp increase in US rates, hitting multi-year highs against its peers and flirting with a 24-year peak versus the yen.

“The yen is, sooner rather than later, going to come under renewed selling pressure” if the Bank of Japan does not change its loose monetary policy, Rob Carnell at ING Groep told Bloomberg Television.

“I think it’s a question of when rather than if with them.”

Oil prices sank, extending Friday’s retreat, on demand concerns China sticks to an economically damaging zero-Covid policy to fight a fresh outbreak of the disease.

Parts of Shanghai were put back into lockdown and officials carried out mass testing on millions of people, just weeks after lifting strict measures in the country’s biggest city.

– Key figures at around 0230 GMT –

Tokyo – Nikkei 225: DOWN 2.6 percent at 27,088.86 (break)

Hong Kong – Hang Seng Index: DOWN 2.8 percent at 21,195.77

Shanghai – Composite: DOWN 1.2 percent at 3,245.71

Dollar/yen: UP at 134.82 yen from 134.42 yen late Friday

Euro/dollar: DOWN at $1.0485 from $1.0526

Euro/pound: UP at 85.44 pence from 85.39 pence

Pound/dollar: DOWN at $1.2270 from $1.2309

Brent North Sea crude: DOWN 1.8 percent at $119.80 per barrel

West Texas Intermediate: DOWN 1.8 percent at $118.55 per barrel

New York – Dow: DOWN 2.7 percent at 31,392.79 (close)

London – FTSE 100: DOWN 2.1 percent at 7,317.52 (close)

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‘My apartment vibrates’: New Yorkers fight noisy helicopter rides




In this file photo taken on October 14, 2019 a helicopter flies past the Statue of Liberty as the sun sets in New York City
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After a period of blissful silence overhead due to the Covid-19 pandemic, New Yorkers are dealing again with a familiar problem: noisy helicopters.

“With the bigger helicopters, my apartment vibrates,” said Melissa Elstein, who campaigns to ban non-essential chopper flights.

“They pollute our air, creating noise pollution which has negative health impacts,” the 56-year-old told AFP.

New York regularly hums with the whirr of helicopters circling the skies as tourists eye the city from above during short, pricey, sightseeing tours.

They also transport wealthy residents keen to avoid traffic jams on their way to holiday homes by the beach in the plush Hamptons.

Elstein is far from the only New Yorker unhappy at the near-constant din caused by the tens of thousands of flights every year.

Last year, the city received 25,821 calls to its hotline complaining about helicopter noise, an increase from 10,359 in 2020.

The vast majority of complaints — 21,620 — came from Manhattan.

Some respite may be in the offing.

Earlier this month, the New York state legislature approved a bill that could see companies fined $10,000 a day for generating “unreasonable” noise levels.

If Governor Kathy Hochul signs it into law, it would be the first piece of state legislation to tackle noise pollution from the helicopters.

Senator Brad Hoylman, who sponsored the bill, said that “many New Yorkers can no longer work from home comfortably, enjoy a walk along the waterfront, or keep a napping child asleep because of the incessant noise and vibrations from non-essential helicopter use.”

He noted that one helicopter produces 43 times more carbon dioxide per hour than an average car.

“Helicopter noise is not just annoying, it’s detrimental to our health and our environment,” Hoylman said in a statement.

For Andy Rosenthal — president of Stop the Chop, an organization of volunteers seeking to ban non-essential helicopter flights — the legislation does not go far enough.

“It’s a good first step. (But) it is not what we had hoped for. The fight continues,” he said.

– ‘Background noise’ –

New York City has three active heliports: two in Midtown on the Hudson and East rivers, used for corporate and chartered flights, and another near Wall Street in lower Manhattan, from which tourist flights depart.

A 15-20 minute aerial view of New York costs a minimum of about $200 per tourist.

Amid complaints, the administration of then-mayor Bill de Blasio agreed with the industry to reduce the number of tourist flights per year from 60,000 to 30,000, starting in 2017.

They also restricted tourist rides departing New York City to airspace over the rivers surrounding Manhattan, banning them from soaring above land.

Sightseeing helicopters taking off from New Jersey are allowed to fly above Manhattan though, including Central Park.

Commuter flights leaving New York City are also permitted to fly directly over buildings.

“This is an industry that doesn’t have to exist, shouldn’t exist. (Just) for the convenience of the very few,” said Elstein.

Some residents, though, have become used to the sound and accept it as a fact of living in America’s bustling financial, cultural and tourism capital.

“It’s a background noise,” said Mark Roberge, who lives near the heliport at the southern tip of Manhattan.

“It seems to be part of the experience.”

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Thousands of sheep drown as Sudan ship sinks




Only around 700 of the 15,800 sheep on board were rescued when the overloaded cargo vessel 'Badr 1' sank at Sudan's Suakin port on Sunday
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An overladen ship crammed with thousands of sheep sank Sunday in Sudan’s Red Sea port of Suakin drowning most animals on board but with all crew surviving, officials said.

The livestock vessel was exporting the animals from Sudan to Saudi Arabia when it sank after several thousand more animals were loaded on board than it was meant to carry.

“The ship, Badr 1, sank during the early hours of Sunday morning,” a senior Sudanese port official said, speaking on condition of anonymity. “It was carrying 15,800 sheep, which was beyond its load limits.”

The official said the ship was supposed to carry only 9,000 sheep.

Another official, who said that all crew were rescued, raised concerns over the economic and environmental impact of the accident.

“The sunken ship will affect the port’s operation,” the official said. 

“It will also likely have an environmental impact due to the death of the large number of animals carried by the ship”.

Omar al-Khalifa, the head of the national exporters’ association, said the ship took several hours to sink at the pier — a window that meant it “could have been rescued.”

The total value of the lost livestock “is around 14 million Saudi riyals, the equivalent of four million dollars,” said Saleh Selim, the head of the association’s livestock division, confirming also that the sheep were loaded onto the vessel at Suakin port.

He said livestock owners recovered only around 700 sheep “but they were found very ill and we don’t expect them to live long.” 

Selim called for an investigation into the incident. 

Last month, a massive fire broke out in the cargo area of Suakin port, lasting hours and causing heavy damage. It was not clear what caused the blaze.

An investigation has been launched to determine the cause of the fire, but has yet to release its findings.

The historic port town of Suakin is no longer Sudan’s main foreign trade hub, a role which has been taken by Port Sudan, some 60 kilometres (40 miles) away along the Red Sea coast.

There have been moves to redevelop Suakin port, but a 2017 deal with Turkey to restore historic buildings and expand the docks was suspended after the ouster of longtime president Omar al-Bashir. 

Sudan remains gripped by a chronic economic crisis, which has deepened following last year’s military coup led by army chief Abdel Fattah al-Burhan.

The military takeover triggered punitive measures, including aid cuts by Western governments, who demanded the restoration of the transitional administration installed after Bashir was toppled.

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Despite major gas deal, energy giant warns consumers to turn down heating




France's TotalEnergies CEO Patrick Pouyanne at a signing ceremony in Doha
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TotalEnergies chief Patrick Pouyanne hailed a deal to expand production in the world’s biggest natural gas field in Qatar but told AFP on Sunday that more projects are needed and consumers will still have to “turn down the heating” to ease the growing price crisis.

The chairman and chief executive of the French multinational that is one of the world’s most powerful energy companies said putting two billion dollars into a joint venture with Qatar Energy was the company’s response to doubts expressed after it ended investment in Russia.

The deal for a 6.25-percent stake in the North Field East project was announced Sunday barely two months after TotalEnergies said it would pump no more money into Russia where it has huge natural gas interests.

Pouyanne, who has headed TotalEnergie since 2018, told AFP the deal was part of a “success story” with Qatar, where it struck a first accord in 1986. 

“It comes at the right time. Some were asking the question what would TotalEnergies do in place of Russia? This is the answer,” he said in an interview.

“We have announced projects in the United States. We wanted another one. We have added Qatar to the portfolio.”

The company is determined to remain a leader in liquefied natural gas (LNG), he stressed.

Pouyanne said his company would help build a new LNG train, or production factory, for North Field East but the speed of recovering the $2-billion investment would depend on market prices.

– Consumers beware – 

Higher energy prices have gripped Europe with some governments wondering how they will get through the next winter without Russian supplies which are being cut because of the Ukraine war.

Qatar, one of the world’s top three natural gas producers with the United States and Australia, has warned it cannot send more in the short term.

Pouyanne said that consumers “who want electricity all the time”, must use less.

“What consumers can do is turn down the heating a bit in Europe. At the moment there is no heating because it is summer. But my advice is not too much air conditioning either,” he said.

Pouyanne also said more investment in production is needed to “bring prices down”.

The new natural gas complex in Qatar will only be ready at the end of 2025 or early 2026, he said. “We need more to stabilise the market. That’s important.”

TotalEnergies, like Qatar Energy, also wants more medium- and long-term contracts in Europe.

European governments have in recent years refused long-term deals so they can take advantage of market falls.

Russia’s invasion of Ukraine has forced them to change their policy and many have made approaches to Qatar in recent months.

Qatar is attractive, Pouyanne added, because it sells to China, Japan, South Korea and India in Asia, but can also provide Europe.

“Competitive production costs, liquefication costs that benefit from economies of scale and a good position, that is why Qatar has become a leader for liquefied natural gas.”

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