U.S. Supplier Prices Decline
In March, U.S. supplier prices experienced the largest monthly decline since 2020, indicating a moderation in inflation. The producer-price index fell by 0.5% from the previous month, compared to a revised flat reading in January, according to the Labor Department. Year-on-year, supplier prices rose by 2.7% in March, a significant slowdown from the highs reached in the previous year, but still above pre-pandemic levels. In February, PPI increased by 4.9% compared to a year earlier.
China’s Exports Rebound
China’s exports rebounded sharply in March, defying expectations and reflecting increased demand in Asia and Europe, as well as improved supply chain conditions. Another factor contributing to the unexpectedly strong results was a more than doubling of Chinese exports to Russia in March compared to the previous year, highlighting the warming economic ties between the two nations. Outbound shipments from China surged by 14.8% in March from a year earlier, reversing the 6.8% decline recorded during the first two months of 2023 and ending a nearly half-year string of drops that stretched back to October.
U.S. Unemployment Claims Rise
Applications for unemployment benefits in the United States increased for the first time in three weeks, largely due to a jump in California, signaling further softening in the labor market. Labor Department data showed that initial unemployment claims rose by 11,000 to 239,000 in the week ended April 8, slightly higher than the median forecast of 235,000 applications in a Bloomberg survey of economists.
Court Ruling on Mifepristone
A late-night ruling by the Fifth Court of Appeals, requested by the Department of Justice, will temporarily keep mifepristone, a pill used for abortions, on shelves in the United States. The decision blocked part of an earlier ruling made by a judge in Texas that would have prevented sales of the drug starting from Saturday. However, rules about its use will revert to their previous, more restrictive forms.
Leaked Intelligence Files
According to the Washington Post, a man working on a military base leaked classified American intelligence files in a conservative online group. These materials reveal infighting among Russia’s top brass, particularly over the role of Wagner, a mercenary group, in the Ukraine war. They also disclose that America monitored the private conversations of António Guterres, the UN’s chief, over his suspected pro-Russian sympathies.
British Lenders Report Defaults
A Bank of England survey showed that British lenders reported an increase in the number of loan defaults in the three months to February, as rising interest rates continued to impact borrowers. A net 14% of lenders reported that more households and businesses missed repayments on secured loans such as mortgages, which was well above the -1.4% recorded in the previous quarter. Excluding the onset of the pandemic, the BoE’s credit conditions survey pointed to the highest level of defaults since the financial crisis, although the data did not provide details on the total number of defaults.
OPEC Oil Supply Cuts
The latest data from the Organization of Petroleum Exporting Countries (OPEC) indicates that oil supply cuts agreed by OPEC+ nations last week are putting global markets on track for a substantial supply deficit that is expected to widen as the year progresses. According to OPEC figures, world markets may face a shortfall of about 2 million barrels per day in the fourth quarter due to the cutbacks announced by Saudi Arabia and its partners. The supply reductions, announced on April 2, surprised crude traders and sent prices rallying, with OPEC officials citing the need to deter speculators from making unwarranted wagers against oil. However, the International Energy Agency, which advises consuming nations, called the decision a “bad surprise.”
Euro Surges Against Dollar
The euro surged to its highest level against the dollar since April 2022, with a 0.5% increase to $1.1043 on Thursday, surpassing its previous 2023 high on Feb. 2. This upward trend has been fueled by a widening interest-rate differential, as the US Federal Reserve slows its pace of interest-rate increases while the European Central Bank maintains a more aggressive stance. Over the past six months, the euro has strengthened against the dollar in five of them, reflecting this divergence in monetary policies.
German Foreign Minister Visits China
Germany’s foreign minister, Annalena Baerbock, has begun a visit to China, with hopes from EU countries that she will reassert a common European policy following a controversial press interview by Emmanuel Macron. In the interview, the French president’s remark about not getting “caught up in crises that are not ours” in reference to Taiwan was seen as a victory for China’s efforts to drive a wedge between the United States and Europe.
Oxford Malaria Vaccine Approved
A new malaria vaccine developed at Oxford University has received regulatory approval in Ghana, marking a significant milestone in the fight against a disease that is a leading cause of infant mortality worldwide. The R21 vaccine, developed at Oxford’s Jenner Institute, has been the culmination of 30 years of malaria vaccine research. This approval paves the way for a high-efficacy vaccine to be supplied to countries in need on a larger scale. Recent studies have shown that the R21 vaccine has demonstrated efficacy as high as 80% in some groups.
Brazil Calls for Alternative to Dollar
Brazil’s president, Luiz Inácio Lula da Silva, has called on developing countries to work towards replacing the US dollar with their own currencies in international trade, aligning with China’s efforts to end the dominance of the greenback in global commerce. During his state visit to China, Lula urged the countries of the Brics group, which includes Brazil, China, Russia, India, and South Africa, to come up with their own alternative currency for trade. Lula passionately questioned why all countries have to base their trade on the dollar during a speech at the New Development Bank in Shanghai, also known as the “Brics bank”.
Australia’s Strong Job Market
Australia’s employment growth has exceeded expectations for the second consecutive month in March, showcasing the resilience of its economy and reinforcing the case for the Reserve Bank to raise interest rates. According to government data, employers added 53,000 roles, more than double economists’ estimates, driven by full-time positions. The jobless rate remained at 3.5%, which is close to a 50-year low, surpassing forecasts of an increase to 3.6%. As a result, the Australian currency has advanced, and bond yields have climbed.