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Asian markets track Wall St down as recession worries return

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Equity markets are suffering a Christmas chill owing to concerns about rising interest rates and a possible recession
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Asian markets fell again Friday after forecast-beating US data fuelled expectations that the Federal Reserve will lift interest rates well into next year.

A glum warning from top chipmaker Micron and worries about China’s surging Covid cases added to the less-than-Christmassy mood on trading floors.

Investors have been on a rollercoaster ride this month with slowing inflation and an easing of monetary policy hikes offset by central bank warnings that borrowing costs will likely have to go higher than expected.

Those worries were increased by the Bank of Japan’s shock decision this week to move away from its ultra-loose monetary policy, increasing bets on an even more restrictive investment environment in 2023.

Wall Street’s three main indexes ended well in the red Thursday after revised figures showed the world’s biggest economy grew a lot more in July-September than first thought, while jobless claims rose less than expected last week.

The readings suggested that despite almost a year of rate hikes and soaring inflation, activity remained strong and the Fed had much more work to do.

That came as Micron Technology said the industry’s worst supply glut for more than 10 years meant it would struggle to return to profit next year.

It also saw a big drop in sales and a heftier loss than forecast this quarter.

“The Grinch selloff is firmly in place after Micron delivered a gloomy outlook and as better-than-expected US economic data supported the Fed’s case for more ongoing rate increases,” said OANDA’s Edward Moya. 

“Global coordinated central bank tightening has yet to fully impact most of the economic readings for the major economies and that should have investors nervous over earnings downgrades and credit risks.”

The losses in New York extended into Asia, where Tokyo shed more than one percent, with Hong Kong, Shanghai, Sydney, Seoul, Singapore, Wellington, Taipei, Manila and Jakarta also well down.

“The consumer has a lot more strength than I think what the market was pricing in,” Priya Misra, of TD Securities, told Bloomberg Television.

“When the accumulated savings they’ve had since Covid, when that runs out, which we think happens by the middle of next year, that’s when consumer spending slows down.”

Hopes that China’s growth will surge as it rolls back its zero-Covid strategy have been overshadowed by a surge in cases across the country that has kept people at home, and battered travel and economic activity.

“The spike in Covid-19 infection rates following the easing of mobility restrictions will still constrain economic activity in the December-January time frame,” said Guan Yi Low, at M&G Investments.

Still, expectations that demand for crude will pick up in the new year, as well as a drop in US stockpiles, is providing healthy support to the commodity, with both main contracts rising about five percent this week.

– Key figures around 0230 GMT –

Tokyo – Nikkei 225: DOWN 1.1 percent at 26,210.69 (break)

Hong Kong – Hang Seng Index: DOWN 0.6 percent at 19,570.98 

Shanghai – Composite: DOWN 0.5 percent at 3,041.16 

Dollar/yen: UP at 132.75 yen from 132.36 yen on Thursday

Euro/dollar: UP at $1.0604 from $1.0598

Pound/dollar: UP at $1.2045 from $1.2036

Euro/pound: UP at 88.05 pence from 88.02 pence

West Texas Intermediate: UP 1.5 percent at $78.62 per barrel

Brent North Sea crude: UP 1.4 percent at $82.07 per barrel 

New York – DOWN 1.1 percent at 33,027.49 (close)

London – FTSE 100: DOWN 0.4 percent at 7,469.28 (close) 

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In Brazil, hopes to use AI to save wildlife from roadkill fate

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Some 475 million vertebrate animals die on Brazilian roads every year
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In Brazil, where about 16 wild animals become roadkill every second, a computer scientist has come up with a futuristic solution to this everyday problem: using AI to alert drivers to their presence.

Direct strikes on the vast South American country’s extensive road network are the top threat to numerous species, forced to live in ever-closer proximity with humans.

According to the Brazilian Center for Road Ecology (CBEE), some 475 million vertebrate animals die on the road every year — mostly smaller species such as capybaras, armadillos and possums.

“It is the biggest direct impact on wildlife today in Brazil,” CBEE coordinator Alex Bager told AFP.

Shocked by the carnage in the world’s most biodiverse country, computer science student Gabriel Souto Ferrante sprung into action.

The 25-year-old started by identifying the five medium- and large-sized species most likely to fall victim to traffic accidents: the puma, the giant anteater, the tapir, the maned wolf and the jaguarundi, a type of wild cat.

Souto, who is pursuing a master’s degree at the University of Sao Paulo (USP), then created a database with thousands of images of these animals, and trained an AI model to recognize them in real time.

Numerous tests followed, and were successful, according to the results of his efforts recently published in the journal Scientific Reports.

Souto collaborated with the USP Institute of Mathematical and Computer Sciences.

For the project to become a reality, Souto said scientists would need “support from the companies that manage the roads,” including access to traffic cameras and “edge computing” devices — hardware that can relay a real-time warning to drivers like some navigation apps do.

There would also need to be input from the road concession companies, “to remove the animal or capture it,” he told AFP.

It is hoped the technology, by reducing wildlife strikes, will also save human lives.

– ‘More roads, more vehicles’- 

Bager said a variety of other strategies to stop the bloodshed on Brazilian roads have failed.

Signage warning drivers to be on the lookout for crossing animals have little influence, he told AFP, leading to a mere three-percent reduction in speed on average.

There are also so-called fauna bridges and tunnels meant to get animals safely from one side of the road to the other, and fences to keep them in — all insufficient to deal with the scope of the problem, according to Bager.

In 2014, he created an app called Urubu with other ecologists, to which thousands of users contributed information, allowing for the identification of roadkill hotspots.

The project helped to create public awareness and even inspired a bill on safe animal crossing and circulation, which is awaiting a vote in Congress. 

A lack of money saw the app being shut down last year, but Bager is intent on having it reactivated.

“We have more and more roads, more vehicles and a number of roadkill animals that likely continues to grow,” he said.

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Honda to build major EV plant in Canada: govt source

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Honda hopes to sell only zero-emission vehicles by 2040, with a goal of going carbon-neutral in its own operations by 2050
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Japanese auto giant Honda will open an electric vehicle plant in eastern Canada, a Canadian government source familiar with the multibillion-dollar project told AFP on Monday.

The federal government as well as the province of Ontario, where the plant will be built, will both provide some financial incentives for the deal, according to the source, who spoke on condition of anonymity.

The official announcement is due Thursday, though Ontario premier Doug Ford hinted at the deal on Monday.

“This week, we’ve landed a new deal. It will be the largest deal in Canadian history. It’ll be double the size of Volkswagen,” he said, referring to a battery plant announced last year, for which the German automaker pledged Can$7 billion (US$5 billion) in investment.

Canada in recent years has been positioning itself as an attractive destination for electric vehicle investment, touting tax incentives, renewable energy access and its rare mineral deposits.

The Honda plant, to be built an hour outside Toronto, in Alliston, will also produce electric-vehicle batteries, joining existing Volkswagen and Stellantis battery plants.

In January, when news of the deal first bubbled up in the Japanese press, the Nikkei newspaper estimated it would be worth Can$14 billion — numbers backed up by Canadian officials recently.

In the federal budget announced last week, Prime Minister Justin Trudeau’s government introduced a new business tax credit, granting companies a 10 percent rebate on construction costs for new buildings used in key segments of the electric vehicle supply chain.

Canada’s strategy follows that of the neighboring United States, whose Inflation Reduction Act has provided a host of incentives for green industry.

Honda hopes to sell only zero-emission vehicles by 2040, with a goal of going carbon-neutral in its own operations by 2050.

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Denmark launches its biggest offshore wind farm tender

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Denmark's offshore wind parks currently generate 2.7 gigawatts of electricity
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The Danish Energy Agency on Monday launched its biggest tender for the construction of offshore wind farms, aimed at producing six gigawatts by 2030 — more than double Denmark’s current capacity.

Offshore wind is one of the major sources of green energy that Europe is counting on to decarbonise electricity production and reach its 2050 target of net zero carbon production, but it remains far off the pace needed to hit its targets.

Denmark’s offshore wind parks currently generate 2.7 gigawatts of electricity, with another one GW due in 2027.

The tender covers six sites in four zones in Danish waters: North Sea I, Kattegat, Kriegers Flak II and Hesselo.

“We are pleased that we can now offer the largest offshore wind tender in Denmark to date. This is a massive investment in the green transition,”  Kristoffer Bottzauw, head of the Danish Energy Agency, said in a statement.

Investment in offshore wind plummeted in Europe in 2022 due to supply chain problems, high interest rates and a jump in prices of raw materials, before bouncing back in 2023.

A record 4.2 gigawatts was installed in Europe last year, when a record 30 billion euros in new projects were approved, the trade association WindEurope said in January.

It said it was optimistic about the future of offshore wind in Europe, expecting new offshore wind capacity of around five gigawatts per year for the next three years.

However, it noted that that was still far short of what is needed if Europe wants to hit its 2030 target of 111 gigawatts of offshore wind installed capacity, with less than 20 gigawatts installed at the end of 2023.

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