EUROZONE
Slow demand hits output
Private-sector output remained subdued this month as demand stayed stagnant and companies scaled back employment and expansion plans. The purchasing managers’ index inched up to 51.6 from 51.5 last month, IHS Markit said yesterday. The bloc is headed for “lackluster” growth of about 0.2 percent in the second quarter, it added. The eurozone — Germany in particular — has struggled to emerge from a manufacturing shock since the second half of last year amid global trade tensions that threaten exports.
INDIA
Stocks hit record highs
Shares yesterday jumped to record highs as early results in the world’s biggest election showed Prime Minister Narendra Modi on course for a second term. Traders and business leaders welcomed trends in the vote count showing that Modi’s Bharatiya Janata Party was set to win a majority. The Bombay Stock Exchange’s Sensex rose more than 2 percent to peak at 40,124.50, while the Nifty also rose more than 2 percent to 12,041.
GERMANY
Consumers lift economy
Consumers led Europe’s largest economy out of stagnation at the start of the year, as the biggest spending increase in almost eight years made up for a manufacturing slump and troubles plaguing automakers. Household spending climbed 1.2 percent in the first quarter, the most since 2011, government data showed. Construction and capital investment gained, while net trade contributed 0.2 percentage points as exports outpaced imports. The economy grew 0.4 percent in the period.
UNITED STATES
Interest rate cut ‘not likely’
Persistent low inflation is one of “many risks” to the economic outlook, but that does not mean an interest rate cut is likely any time soon, New York Federal Reserve Bank President John Williams said on Wednesday. He said that he would support a rate cut “down the road” if appropriate to get inflation back to target, but “I don’t think we’re at that point or will be in the very near future.”
COSMETICS
Natura to buy Avon
Brazil’s Natura Cosmeticos SA agreed to buy rival Avon Products Inc in an all-stock deal valued at about US$2 billion, positioning it as a growing force in the booming industry. Controlling shareholders of Natura, which in 2017 bought the Body Shop retail chain, are to form a new publicly traded holding company that would offer 0.3 shares for every share of London-based Avon, a statement said. Including debt, the transaction is valued at US$3.7 billion, the companies said.
ENERGY
Pakistan to get Saudi oil
Pakistani official Abdul Hafeez Shaikh said that Saudi Arabian oil would start flowing to Islamabad in July, with payments deferred for three years. The buy-now-pay-later deal with the kingdom, reached in October last year, would enable the cash-strapped nation to overcome a balance of payment crisis, said Shaikh, adviser to Pakistani Prime Minister Imran Khan on finance and economic affairs. Shaikh on Wednesday night took to Twitter, thanking Saudi Arabian Crown Prince Mohammed bin Salman for “activating the deferred payment for petroleum products” of US$275 million per month. The value amounts to US$3.2 billion per year. The crown prince visited Pakistan in February.
DECOUPLING? In a sign of deeper US-China technology decoupling, Apple has held initial talks about using Baidu’s generative AI technology in its iPhones, the Wall Street Journal said China has introduced guidelines to phase out US microprocessors from Intel Corp and Advanced Micro Devices Inc (AMD) from government PCs and servers, the Financial Times reported yesterday. The procurement guidance also seeks to sideline Microsoft Corp’s Windows operating system and foreign-made database software in favor of domestic options, the report said. Chinese officials have begun following the guidelines, which were unveiled in December last year, the report said. They order government agencies above the township level to include criteria requiring “safe and reliable” processors and operating systems when making purchases, the newspaper said. The US has been aiming to boost domestic semiconductor
Nvidia Corp earned its US$2.2 trillion market cap by producing artificial intelligence (AI) chips that have become the lifeblood powering the new era of generative AI developers from start-ups to Microsoft Corp, OpenAI and Google parent Alphabet Inc. Almost as important to its hardware is the company’s nearly 20 years’ worth of computer code, which helps make competition with the company nearly impossible. More than 4 million global developers rely on Nvidia’s CUDA software platform to build AI and other apps. Now a coalition of tech companies that includes Qualcomm Inc, Google and Intel Corp plans to loosen Nvidia’s chokehold by going
ENERGY IMPACT: The electricity rate hike is expected to add about NT$4 billion to TSMC’s electricity bill a year and cut its annual earnings per share by about NT$0.154 Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has left its long-term gross margin target unchanged despite the government deciding on Friday to raise electricity rates. One of the heaviest power consuming manufacturers in Taiwan, TSMC said it always respects the government’s energy policy and would continue to operate its fabs by making efforts in energy conservation. The chipmaker said it has left a long-term goal of more than 53 percent in gross margin unchanged. The Ministry of Economic Affairs concluded a power rate evaluation meeting on Friday, announcing electricity tariffs would go up by 11 percent on average to about NT$3.4518 per kilowatt-hour (kWh)
OPENING ADDRESS: The CEO is to give a speech on the future of high-performance computing and artificial intelligence at the trade show’s opening on June 3, TAITRA said Advanced Micro Devices Inc (AMD) chairperson and chief executive officer Lisa Su (蘇姿丰) is to deliver the opening keynote speech at Computex Taipei this year, the event’s organizer said in a statement yesterday. Su is to give a speech on the future of high-performance computing (HPC) in the artificial intelligence (AI) era to open Computex, one of the world’s largest computer and technology trade events, at 9:30am on June 3, the Taiwan External Trade Development Council (TAITRA) said. Su is to explore how AMD and the company’s strategic technology partners are pushing the limits of AI and HPC, from data centers to