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Markets fluctuate, oil falls again as recession warnings build

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Soaring prices and central banks' battle to rein them in have sent a chill through global trading floors this year
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Asian markets struggled Thursday to recover from the previous day’s battering, while oil extended losses, after Federal Reserve boss Jerome Powell admitted the economy could tip into recession as the bank hikes interest rates to fight runaway inflation.

Soaring prices and central banks’ battle to rein them in have sent a chill through global trading floors this year, while investors are also having to deal with the uncertainty wrought by the Ukraine war and patchy pandemic recovery.

Commentators have warned for some time that the world economy could be heading for another contraction owing to the sharp increase in borrowing costs and rampant inflation, which is at decades highs in several countries.

And on Wednesday the head of the most powerful central bank in the world told lawmakers that it was “certainly a possibility”.

While saying the economy was strong enough for rates to rise, he added that “frankly, the events of the last few months around the world have made it more difficult for us to achieve what we want, which is two percent inflation and still a strong labour market.”

He also warned: “Inflation has obviously surprised to the upside over the past year, and further surprises could be in store”.

The Fed this month hiked rates by 75 basis points and is expected to do the same in July, with some observers predicting two more such moves after that.

After a day of swings, Wall Street ended in negative territory, though off big early lows.

Asia fluctuated after a big sell-off Wednesday, with optimism at a premium among investors and analysts saying it is unlikely to improve anytime soon.

Hong Kong, Sydney, Singapore and Wellington were slightly higher but Tokyo, Shanghai, Seoul, Taipei, Manila and Jakarta fell.

“Having listened to Powell’s lengthy Senate testimony… it is clear that inflation is the domestic issue at the top of the political agenda,” said SPI Asset Management’s Stephen Innes. 

“Powell consistently bobbed and weaved his way through commenting on anything of fiscal nature but was focused on deploying the tools within the Fed’s power to address their dual mandate” of reining in inflation and keeping unemployment in check. 

“So we should still position for more rate hike fallout to occur.”

Powell’s comments came as other top economists added to the recession talk, with former New York Fed President Bill Dudley saying it was “inevitable within the next 12 to 18 months”.

And Deutsche Bank CEO Christian Sewing said there was a 50 percent chance of a contraction next year.

Elon Musk, JP Morgan boss Jamie Dimon and Nouriel Roubini are among several others to have made similar forecasts.

“We are still in an era where uncertainty is elevated and is expected to remain so for quite a while,” said JoAnne Feeney, of Advisors Capital Management, on Bloomberg Television.

“It’s risky right now in terms of the forward outlook for the global economy. Recession risk has clearly risen.”

The prospect of a retreat in the global economy continued to drag oil prices down as traders fret over demand, with both main contracts down more than three percent, having tumbled on Wednesday.

Brent and WTI have dropped around 15 percent over the past week, even with sanctions on Russian crude exports and China’s gradual reopening from lockdowns.

Adding to the selling was data Wednesday indicating a jump in US stockpiles.

“A slowdown in global growth is a risk to oil demand, which could help ease some of the tightness in the market,” Warren Patterson, at ING Groep, said. 

“Already, we have seen demand estimates revised lower.”

– Key figures at around 0230 GMT –

Tokyo – Nikkei 225: FLAT at 26,146.71 (break)

Hong Kong – Hang Seng Index: UP 0.2 percent at 21,039.28

Shanghai – Composite: DOWN 0.1 percent at 3,263.02

West Texas Intermediate: DOWN 3.5 percent at $102.51 per barrel

Brent North Sea crude: DOWN 3.2 percent at $108.14 per barrel

Dollar/yen: DOWN at 135.74 yen from 136.22 yen late Wednesday

Pound/dollar: DOWN at $1.2241 from $1.2263

Euro/dollar: DOWN at $1.0561 from $1.0570

Euro/pound: UP at 86.27 pence from 86.17 pence

New York – Dow: DOWN 0.2 percent at 30,483.13 (close)

London – FTSE 100: DOWN 0.9 percent at 7,089.22 (close)

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Workers in Chile strike at world’s largest copper producer

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An aerial view of the Codelco company copper smelter in Puchuncavi, Valparaiso region, Chile, is seen June 18, 2022
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Workers at Chile’s state mining company Codelco, the largest producer of copper in the world, launched an open- ended strike Wednesday to protest the closure of a foundry in one of the country’s most polluted regions.

Police said they arrested 18 people as striking workers, waving Chilean flags and setting tires on fire, blocked entry to six mining facilities around the country. They did this mainly at the Ventanas foundry, which the government announced last week that it would shut down.

Union leaders said the strike had paralyzed Codelco altogether but Finance Minister Mario Marcel said it had “altered” production but not shut it down.

The Copper Workers Federation said the strike will cost Codelco — which produces around eight percent of the world’s copper amounting to 10-15 percent of Chile’s GDP — $20 million a day. Marcel contested that figure.

The FTC represents around 14,000 Codelco workers and another 40,000 external contractors, according to Pantoja.

Unions described the closure of the Ventanas foundry, located around 140 kilometers west of the capital Santiago, as “arbitrary,” and are demanding the government invests $54 million to bring the plant up to the highest environmental standards.

– ‘Standards very low’ –

Government spokeswoman Camila Vallejo said the government remains open to dialogue but that it was focused on “a more sustainable model of development.”

“Our standards are very low and if we truly want to meet our environmental commitments we have to be guided by” World Health Organization standards, she added.

Codelco’s decision comes after an incident on June 9 when 115 people, mostly school children, suffered sulphur dioxide poisoning released by heavy industry, provoking the closure of schools in the area.

It was the second such incident in a matter of just three days.

Sulphur dioxide is a classic air pollutant usually linked to the burning of fossil fuels.

Greenpeace described the area around the Ventanas plant as “Chile’s Chernobyl” following a serious incident in 2018 when around 600 people in Quintero and Puchuncavi received medical treatment for symptoms such as vomiting blood, headaches, dizziness, paralysis of their extremities and strange red marks on children’s skin.

Last week, President Gabriel Boric hit out at Chile’s record on polluting the environment.

“We don’t want any more areas of (environmental) sacrifice,” he said.

“There are now hundreds of thousands of people who live in our country exposed to severe degradation of the environment that we have provoked or allowed and, as a Chilean, that makes me feel ashamed.”

Pollution accumulated in the area of Quintero and Puchuncavi, home to around 50,000 people, after the government decided in 1958 to convert it into an industrial center that now hosts four coal-fired power stations and oil and copper refineries.

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Workers strike at world’s largest copper producer, Chile’s Codelco

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An aerial view of the Codelco company copper smelter in Puchuncavi, Valparaiso region, Chile, is seen June 18, 2022
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Workers at Chile’s state mining company Codelco, the largest producer of copper in the world, went on an “indefinite” strike on Wednesday, unions said, protesting the closure of a foundry in one of the country’s most polluted regions.

Codelco announced last week that it would close the Ventanas foundry in the towns of Quintero and Puchuncavi.

The Copper Workers Federation (FTC) released a statement saying there was “full support for this paralyzation (of work) in solidarity with the workers at the Ventanas division” from Codelco’s other divisions.

FTC president Amador Pantoja told a local television station the strike will cost Codelco — which produces around eight percent of the world’s copper amounting to 10-15 percent of Chile’s GDP — $20 million a day.

However, Finance Minister Mario Marcel contested that figure.

“For those figures to be correct, all Codelco operations would have to be paralyzed abruptly without this production being recovered in the future and none of those things are happening right now,” said Marcel.

“There is no paralyzation of operations, there’s a disruption of access by groups of workers.”

The FTC represents around 14,000 Codelco workers and another 40,000 external contractors, according to Pantoja.

Unions described the closure of the Ventanas foundry, located around 140 kilometers west of the capital Santiago, as “arbitrary,” and are demanding the government invests $54 million to bring the plant up to the highest environmental standards.

– ‘Standards very low’ –

The entrance to Ventanas was blocked by burning roadblocks and dozens of workers waving Chilean flags on Wednesday.

“No to closure, yes to investment,” read one banner.

Spokeswoman Camila Vallejo said the government “remains open to dialogue” but that it was focused on “a more sustainable model of development.”

“Our standards are very low and if we truly want to meet our environmental commitments we have to be guided by” World Health Organization standards, she added.

Codelco’s decision comes after an incident on June 9 when 115 people, mostly school children, suffered sulphur dioxide poisoning released by heavy industry, provoking the closure of schools in the area.

It was the second such incident in a matter of just three days.

Sulphur dioxide is a classic air pollutant usually linked to the burning of fossil fuels.

Greenpeace described the area around the Ventanas plant as “Chile’s Chernobyl” following a serious incident in 2018 when around 600 people in Quintero and Puchuncavi received medical treatment for symptoms such as vomiting blood, headaches, dizziness, paralysis of their extremities and strange red marks on children’s skin.

Last week, President Gabriel Boric hit out at Chile’s record on polluting the environment.

“We don’t want any more areas of (environmental) sacrifice,” he said.

“There are now hundreds of thousands of people who live in our country exposed to severe degradation of the environment that we have provoked or allowed and, as a Chilean, that makes me feel ashamed.”

Pollution accumulated in the area of Quintero and Puchuncavi, home to around 50,000 people, after the government decided in 1958 to convert it into an industrial center that now hosts four coal-fired power stations and oil and copper refineries.

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New antibody therapies fight cancer, drum up investment

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Evusheld is an antibody therapy developed by pharmaceutical company AstraZeneca for the prevention of Covid-19 in immunocompromised patients
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Antibody therapies are offering promising treatment breakthroughs for cancer and other illnesses, generating greater investor interest more than 20 years after they were first commercialised.

Antibodies are proteins that recognise foreign substances, known as antigens, attaching themselves to them to alert the rest of the human immune system.

In 1975, scientists Georges Koehler and Cesar Milstein discovered how to produce them in a laboratory, which later earned them a Nobel Prize for medicine. Dozens of synthetic antibodies have since been developed.

New antibody treatments to be used with chemotherapy have arrived on the scene in recent years.

Most recently, a clinical trial of an antibody developed by pharmaceutical groups Daiichi Sankyo and AstraZeneca caught the attention of leading cancer specialists gathered at the American Society of Clinical Oncology’s annual congress in Chicago this month.

The treatment, Enhertu, was already authorised for breast cancer patients who had large amounts of a protein called HER2. 

The antibody also performed well in patients with smaller quantities of the protein — increasing the number of people who could benefit.

The antibody latches onto the surface of a cancer cell whose receptors no longer work and the cell then “digests” the receptors to recycle them, activating the chemotherapy, explained cancer specialist William Jacot.

“We hadn’t seen such progress, in terms of survival, with a chemotherapy treatment for dozens of years,” said Jacot, a professor at the Montpellier Cancer Institute in southern France.

Although antibody therapy technology has a complex production process, it is less difficult to implement than new treatments using cellular therapy.

Antibodies can be used in different ways to fight cancer. They can target and destroy the proteins necessary to produce cancer cells or act to regulate the immune response.

French biotech firm Inatherys is in the first stage of clinical trials of an antibody treatment for leukaemia, its boss Pierre Launay said.

He said the company’s antibody will be designed act as a “guided missile” and target a receptor that lets iron enter cancer cells, which need the substance. 

The antibody will then release a poison within the cell to destroy it.

Some antibody treatments are being used preventively while others are treatments. For example, AstraZeneca’s Evusheld antibody treatment is used preventively to ward off Covid-19, while Xevudy by British company GSK is used as a treatment.

Treatments are also being developed for inflammatory diseases, which are also a major killer. 

– Booming market –

The promising announcements have triggered interest beyond the scientific community and a flood of investment. French biotech firm ImCheck Therapeutics recently raised almost 100 million euros ($106 million) for an antibody treatment in development.

Pharmaceutical giants are also prepared to spend big to ensure they do not miss out. French company Sanofi bought Belgian biotech firm Ablynx and its mini antibodies, nanobodies, for almost four billion euros in 2018.

Dupixent, Sanofi’s flagship immunotherapy antibody medication, earned more than five billion euros for the pharma giant last year, and Keytruda, an oncological treatment by US firm MSD, generated more than $17 billion in 2021.

According to predictions by research firm Market Data Forecast, the market could grow to reach $249 billion in three years’ time.

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