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.
BUSINESS UPDATE: The iPhone assembler said operations outlook is expected to show quarter-on-quarter and year-on-year growth for the second quarter Hon Hai Precision Industry Co (鴻海精密) yesterday reported strong growth in sales last month, potentially raising expectations for iPhone sales while artificial intelligence (AI)-related business booms. The company, which assembles the majority of Apple Inc’s smartphones, reported a 19.03 percent rise in monthly sales to NT$510.9 billion (US$15.78 billion), from NT$429.22 billion in the same period last year. On a monthly basis, sales rose 14.16 percent, it said. The company in a statement said that last month’s revenue was a record-breaking April performance. Hon Hai, known also as Foxconn Technology Group (富士康科技集團), assembles most iPhones, but the company is diversifying its business to
Apple Inc has been developing a homegrown chip to run artificial intelligence (AI) tools in data centers, although it is unclear if the semiconductor would ever be deployed, the Wall Street Journal reported on Monday. The effort would build on Apple’s previous efforts to make in-house chips, which run in its iPhones, Macs and other devices, according to the Journal, which cited unidentified people familiar with the matter. The server project is code-named ACDC (Apple Chips in Data Center) within the company, aiming to utilize Apple’s expertise in chip design for the company’s server infrastructure, the newspaper said. While this initiative has been
GlobalWafers Co (環球晶圓), the world’s No. 3 silicon wafer supplier, yesterday said that revenue would rise moderately in the second half of this year, driven primarily by robust demand for advanced wafers used in high-bandwidth memory (HBM) chips, a key component of artificial intelligence (AI) technology. “The first quarter is the lowest point of this cycle. The second half will be better than the first for the whole semiconductor industry and for GlobalWafers,” chairwoman Doris Hsu (徐秀蘭) said during an online investors’ conference. “HBM would definitely be the key growth driver in the second half,” Hsu said. “That is our big hope
The consumer price index (CPI) last month eased to 1.95 percent, below the central bank’s 2 percent target, as food and entertainment cost increases decelerated, helped by stable egg prices, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said yesterday. The slowdown bucked predictions by policymakers and academics that inflationary pressures would build up following double-digit electricity rate hikes on April 1. “The latest CPI data came after the cost of eating out and rent grew moderately amid mixed international raw material prices,” DGBAS official Tsao Chih-hung (曹志弘) told a news conference in Taipei. The central bank in March raised interest rates by