Global Economy LIVE | Biden looks for options after OPEC+ decision to cut output

On Thursday, the US Treasury Secretary Janet Yellen gave a speech in Washington ahead of the annual World Bank and International Monetary Fund (IMF) meetings. 

She will call on the World Bank management to develop an “evolution roadmap” and implement changes by December.

Additionally, Yellen would urge them for “deeper work” by next year. “To accelerate this work, my team will step up our engagement with World Bank shareholders and management,” said Yellen. 

According to her, the World Bank and other multilateral development banks (MDBs) need to shift their business models from a country-specific financing one to address global issues like climate change.

Furthermore, the Treasury Secretary said the top priority for countries facing high inflation should be to return to stable prices and this would primarily be the responsibility of the central banks of the country.

United Nations Human Rights Council (UNHRC) passed a resolution on Thursday and ask Sri Lanka to get a grip on the economic crisis and prosecute corrupt officials. The human rights body voted 20-7 to keep focus on Sri Lanka.

Sri Lanka's Foreign Minister Ali Sabry told the chamber in Geneva that Colombo "categorically rejects" the text.
 

US President Joe Biden expressed disappointment on Thursday over announced plans by OPEC+ nations to cut oil output and said the United States was looking at its alternatives. 

"We're looking at what alternatives we may have," Biden told reporters at the White House when asked about the OPEC decision.

"There's a lot of alternatives. We haven't made up our minds yet," he said.

Twitter Inc's shares retreated further from Elon Musk's offer price as investors fretted over financing for the proposed $44-billion buyout of the social media firm against the backdrop of growing economic uncertainty.

Apollo Global Management Inc and Sixth Street Partners, which had been looking to provide financing for the deal, are no longer in talks with the billionaire entrepreneur, two sources familiar with the matter told Reuters.

Shares of the microblogging site were down marginally at $51.12, after rising 20% since Musk this week proposed to go ahead with the April bid of $54.20 per share to take Twitter private.

"There's still some uncertainty based on whether or not Elon can find the actual financing to do the deal," said Randy Frederick, managing director of trading and derivatives for the Schwab Center.

(Reuters)

The United Kingdom's credit outlook was lowered to negative from stable by Fitch Ratings, which cited the risk the government's new growth plan could increase the nation's fiscal deficit. 

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IMF chief Kristalina Georgieva warned that the global recession risks are rising. Georgieva urged policymakers to take concerted action to avoid a "dangerous 'new normal'". 

It is critical to "stabilize the global economy by addressing the most immediate challenges," including fighting inflation, Georgieva said in a speech ahead of the IMF annual meetings next week. 

But she also warned the process could be painful and that if central banks move too aggressively to tamp down price pressures, it could trigger a "prolonged" economic downturn. IMF chief warns global recession risks rising

As the connected exercise equipment manufacturer works to reverse rising losses, Peloton Interactive Inc. announced it expects to lose around 500 workers, or about 12 per cent of its remaining personnel. This will be the company's fourth wave of layoffs this year. 

Barry McCarthy, the company's new chief executive, said he is giving the underperforming business another six months or so to drastically turn things around because, if it doesn't, Peloton is probably not feasible as a stand-alone business.

Following his sharply criticised budget, British Finance Minister Kwasi Kwarteng met with UK banks on Thursday to discuss the skyrocketing mortgage interest rates. 

In the midst of the nation's escalating cost-of-living problem, the chancellor of the exchequer met with some of the largest home loan lenders, according to the Treasury. 

According to data source Moneyfacts, average two-year fixed mortgage rates have surpassed 6 per cent for the first time since November 2008, or the height of the global financial crisis.

Dutch inflation hit a new record of 14.5 per cent in September due to soaring energy prices, official figures said Thursday. This comes as an aftermath of the Russia-Ukraine crisis. The Netherlands, the EU's fifth largest economy, now has one of the highest rates of inflation in Europe. 

The 14.5 per cent increase year-on-year in September comes after inflation hit what was then a record 12 per cent in August.

"The rise in inflation was mainly due to the price development of energy," the Netherlands Central Bureau of Statistics (CBS) said in a statement. 

Global shares rose on Thursday as the dollar eased ahead of US jobs data that could offer a steer on the outlook for interest rates. Meanwhile, oil prices surged after OPEC+ agreed to cut output. 

Gold edged higher on Thursday, buoyed by a subdued dollar and Treasury yields. However, the prices were confined to a narrow range as investors awaited US nonfarm payrolls data that could affect the Federal Reserve's rate hike strategy.

Spot gold was up 0.3 per cent at $1,721.30 per ounce, as of 0653 GMT.

US gold futures rose 0.7 per cent to $1,731.90.

Hong Kong’s home prices are expected to decline 30 per cent by the end of 2023 from last year’s levels, Goldman Sachs Group Inc. has said. The American investment bank revised its forecast downwards amd now expects prices to fall by 15 per cent in both 2022 and 2023, compared with year-end 2021 levels. It sees no change in 2024. 

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Lifted by a subdued dollar and treasury yields, gold prices edged higher on Thursday. Prices were confined to a narrow range as investors awaited more US data that could affect the outlook for the Federal Reserve's rate-hike trajectory.

Spot gold was up 0.4 per cent at $1,722.09 per ounce, as of 0356 GMT. US gold futures rose 0.6 per cent to $1,730.10.

Ratings agency Fitch said on Thursday that they have decided to lower the outlook for the British government’s credit rating from “stable” to “negative”. This announcement came just days after rival company Standard & Poor's took a similar decision following the latest economic measures.

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Asian shares were cautiously higher on Thursday, while the dollar eased ahead of US non-farm payrolls data, and oil prices gained for a fourth day after deep production cuts pledged by OPEC+ members.

MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.4 per cent in early Asia trade, as US futures gained. The index is up 4 per cent this week after falling 13 per cent in September.

Samsung Electronics Co Ltd's third-quarter profit is expected to tumble 25 per cent, the first year-on-year decline in nearly three years. The demand for electronic devices and the chips that power them is on a decline owing to an economic downturn and global inflation.

Operating profit for Samsung, the world's biggest memory chip and smartphone maker, likely fell to 11.8 trillion won ($8.3 billion) in the July-September quarter, according to a Refinitiv SmartEstimate from 22 analysts.

Oil prices rose on Wednesday to three-week highs following a decision by OPEC+ to further tighten global crude supply with a deal to slash oil production by about two million barrel per day. Brent crude rose $1.57, or 1.7 per cent, to settle at $93.37 a barrel. Brent reached a session high of $93.96 per barrel, its highest since September 15.

The dollar rose 1 per cent on the euro and 1.3 per cent on sterling overnight and was trying to hold those gains in bumpy early trade in Asia. The euro has now made two unsuccessful attempts to regain parity this week and last bought $0.9916. Sterling's rebound from record lows has paused just below $1.15.