INDONESIA
Interest rates unchanged
The central bank yesterday left its benchmark interest rate unchanged for a second straight month amid a rebound in the currency and a slowdown in the global economy. The seven-day reverse repurchase rate was left at 6 percent, as predicted by all 26 economists surveyed by Bloomberg. Bank Indonesia Governor Perry Warjiyo and his board raised rates by a total of 175 basis points last year to fight a sell-off in emerging markets.
UNITED KINGDOM
Inflation at two-year low
Annual inflation slowed last month to a two-year low on falling motor fuel and oil prices, sitting just above the Bank of England’s target, official data showed on Wednesday. The Consumer Prices Index 12-month rate declined to 2.1 percent last month from 2.3 percent in November last year, the Office for National Statistics said in a statement. The reading was the lowest level since January 2017 and matched market expectations. The rate was also a whisker away from the bank’s official target level of 2 percent.
UNITED STATES
Recession warning given
A combination of the trade dispute with China and the federal government shutdown could be enough to tip the economy into recession this year, Deutsche Bank chief international economist Torsten Slok said. “If the government shutdown continues it could cause a recession,” he told Bloomberg Television’s Alix Steel and David Westin in an interview. “You could call it a technical recession, we are getting a lot of incoming questions about how do you quantify this risk.”
ECONOMY
Canada cautions on Brexit
The uncertainty over whether the UK will leave the EU is not a direct problem for Canada, but is going to hit the global economy, Canadian Minister of Finance Bill Morneau told reporters on Wednesday on the sidelines of a Cabinet retreat. He sidestepped questions about whether Ottawa would seek to negotiate a free-trade treaty with Britain if it left the EU. “We will continue to be a strong partner of the United Kingdom. Our goal will be to work with them when they get to the point in time when they are able to work with us on continuing a really strong trading relationship,” he said.
BANKING
Softbank bonds jump
Softbank Group Corp bonds jumped yesterday after the company offered to buy back its notes, in a small step by billionaire Masayoshi Son’s firm to cut its massive debt pile. The company said it plans to purchase US$750 million of outstanding US dollar and euro-denominated notes, and would pay with cash on hand. SoftBank’s 3.125 percent euro bonds due in 2025 jumped US$0.013 to US$0.944 as of 1:48pm in Tokyo, the sharpest increase since July last year, and its other securities rose as well. Softbank has about ¥16.6 trillion (US$152 billion) of total consolidated debt, as Son seeks to transform it into a giant investment fund.
AUTOMAKERS
Ford predicts Q4 loss
Ford Motor Co on Wednesday said it expects to post a US$112 million loss for the fourth quarter of last year as it implements a massive restructuring in the US and Europe. It said it would still post a profit after charges stemming from the drive to cut US$11 billion in costs. Ford sees adjusted profit of US$0.30 a share during this period, it said. For the full year, Ford would post a net profit of US$3.7 billion, less than half the 2017 result.
ISSUES: Gogoro has been struggling with ballooning losses and was recently embroiled in alleged subsidy fraud, using Chinese-made components instead of locally made parts Gogoro Inc (睿能創意), the nation’s biggest electric scooter maker, yesterday said that its chairman and CEO Horace Luke (陸學森) has resigned amid chronic losses and probes into the company’s alleged involvement in subsidy fraud. The board of directors nominated Reuntex Group (潤泰集團) general counsel Tamon Tseng (曾夢達) as the company’s new chairman, Gogoro said in a statement. Ruentex is Gogoro’s biggest stakeholder. Gogoro Taiwan general manager Henry Chiang (姜家煒) is to serve as acting CEO during the interim period, the statement said. Luke’s departure came as a bombshell yesterday. As a company founder, he has played a key role in pushing for the
China has claimed a breakthrough in developing homegrown chipmaking equipment, an important step in overcoming US sanctions designed to thwart Beijing’s semiconductor goals. State-linked organizations are advised to use a new laser-based immersion lithography machine with a resolution of 65 nanometers or better, the Chinese Ministry of Industry and Information Technology (MIIT) said in an announcement this month. Although the note does not specify the supplier, the spec marks a significant step up from the previous most advanced indigenous equipment — developed by Shanghai Micro Electronics Equipment Group Co (SMEE, 上海微電子) — which stood at about 90 nanometers. MIIT’s claimed advances last
CROSS-STRAIT TENSIONS: The US company could switch orders from TSMC to alternative suppliers, but that would lower chip quality, CEO Jensen Huang said Nvidia Corp CEO Jensen Huang (黃仁勳), whose products have become the hottest commodity in the technology world, on Wednesday said that the scramble for a limited amount of supply has frustrated some customers and raised tensions. “The demand on it is so great, and everyone wants to be first and everyone wants to be most,” he told the audience at a Goldman Sachs Group Inc technology conference in San Francisco. “We probably have more emotional customers today. Deservedly so. It’s tense. We’re trying to do the best we can.” Huang’s company is experiencing strong demand for its latest generation of chips, called
GLOBAL ECONOMY: Policymakers have a choice of a small 25 basis-point cut or a bold cut of 50 basis points, which would help the labor market, but might reignite inflation The US Federal Reserve is gearing up to announce its first interest rate cut in more than four years on Wednesday, with policymakers expected to debate how big a move to make less than two months before the US presidential election. Senior officials at the US central bank including Fed Chairman Jerome Powell have in recent weeks indicated that a rate cut is coming this month, as inflation eases toward the bank’s long-term target of two percent, and the labor market continues to cool. The Fed, which has a dual mandate from the US Congress to act independently to ensure