Aurelia Butler

LONDON (Reuters) -The dollar inched higher on Thursday as investors waited for U.S. economic data, while bitcoin rose to a record high above $73,800.The dollar index, which gauges the currency against six major peers, rose 0.1% to 102.83. It has largely shrugged off Tuesday’s hotter-than-expected U.S. consumer inflation data and is roughly unchanged since the figures. The index is up around 1.5% this year as U.S. data has shown that the economy remains strong, causing investors to rein in their bets on rapid and deep interest rate cuts.Data due at 1230 GMT (8.30 a.m. ET) – on producer inflation, retail sales and weekly jobless claims – could provide more clues about the timing of rate cuts.”Today’s data in the U.S. will be quite important… in a quiet market environment,” said Francesco Pesole, FX strategist at ING. “That’s surely going to be the big event today.”He added: “This is very much a bit of an in-between week, just waiting for the central bank meetings next week to see what happens.”The Bank of Japan will set interest rates on Tuesday next week, followed by the Federal Reserve on Wednesday and the Bank of England on Thursday.The euro was slightly lower at $1.0942 on Thursday, with no major European economic data to inject volatility, taking its fall for the year to around 0.9%. Sterling was up 0.1% at $1.2811, up 0.6% for the year.Bitcoin continued its upward march, hitting a record $73,803. Exchange-traded bitcoin funds and optimism that the Fed will cut interest rates this year have boosted the biggest cryptocurrency.The dollar was little changed at 147.75 yen, nursing losses of 2% over the last two weeks as investors have positioned for the Bank of Japan to potentially raise interest rates out of negative territory at its meeting next week.Sources told Reuters that Japan’s central bank will debate ending negative rates if big firms’ wage talks yield strong results.Preliminary results of the spring wage negotiations are due on Friday, with several of the country’s biggest companies having already agreed to meet union demands for pay increases.Elsewhere, the dollar climbed 0.1% against the Swedish crown, to 10.239 crowns, after data showed Sweden’s headline inflation slowed more than expected in February.Market pricing on Thursday showed traders see a roughly 75% chance of the Fed cutting rates by June. More

Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.Time was when the bottlenecks in global trade were limited in number and obvious to all. In 1904, the British Royal Navy admiral Sir John Fisher declared: “Five keys lock up the world! Singapore, the Cape, Alexandria, Gibraltar, Dover. These five keys belong to England.”You can see his point, though it didn’t last. Britain’s loss of control in 1956 over the Suez Canal, for which Alexandria had been the main local port, served as a marker for the end of its empire.In today’s more flexible trading system, it’s striking how global goods commerce finds a way round even if one of those doors is locked. These days the real chokepoints of globalisation are more varied in function and location, from the ocean floor to space orbit, and their resilience more uncertain.It’s now three months since the Houthi militants started bombing cargo ships in the Red Sea in earnest. It’s too early to say the attacks are already slipping into a new normal, but certainly there’s no obvious end to them. Yet, although there has been significant disruption to the shipping industry, it’s not been enough to derail global economic growth nor prevent worldwide disinflation.There’s a nice story, for example, in the difficulties tea, coffee and cocoa currently have in getting to Europe. But this matters a lot more to producers at the start of the journey than to consumers at the end of it. Those three commodities together make up a minuscule 0.26 per cent of the UK’s consumer price basket, and annual British food and drink inflation dropped to 7 per cent in January, its lowest rate since April 2022.Freight rates have already started falling back from their recent spikes, which peaked well short of the levels they reached during the Covid pandemic. Container ships have been diverted round the Cape of Good Hope, at extra cost and journey times, but there hasn’t been a big reduction in overall freight volumes. Supply-chain pressures, according to the New York Federal Reserve’s measure, are at historically moderate levels. The trade indicator produced by the Kiel Institute think-tank showed freight rates for cargo to Europe and the volume of goods arriving at North Sea ports stabilising in February. Nature, or at least the global goods industry, is healing.Nor is there a sense of big shifts in long-run patterns of trade or production. One of the big stories in globalisation at the moment is China’s competitive advantage in exporting electric vehicles, the first waves of which are breaking on the shores of the EU economy. The BYD Explorer No 1, the cargo ship containing the first big consignment of EVs from the eponymous Chinese manufacturer, lost 10 days by having to divert round the Cape but still arrived in Bremerhaven two weeks ago with its 5,000 cars safely aboard.Certainly, if the situation persists there will be some reconfiguration of supply chains. Some production, particularly of bulky or lower-tech items, may shift from Asia to Turkey or central and eastern Europe to supply the EU market. But many of the fundamental advantages of cost and productivity will endure. Car manufacturing in Europe is not about to get a substantial reprieve from Chinese competition even if Suez shuts indefinitely. Multinational companies live or die on their ability to assess risk. They had a test run of the Suez Canal being blocked when the Ever Given container ship got stuck there for a week in 2021. It’s not surprising that the shipping industry and international traders have learnt to absorb shocks without noticeable effects on world trade and inflation.But while the Houthi attacks may be coming close to a known known, there are also plenty of known unknowns — commercial chokepoints involving technology at which Admiral Fisher would have boggled. Undersea data cables, electricity interconnectors and gas and power pipelines, air transport corridors and hub airports, GPS space satellites: damage to any of these might seriously hamper the communication on which globalisation depends. The probabilities of damage here are unclear. We’re in the realm of uncertainty rather than risk. Still, some of those systems have endured repeated damage without catastrophe. Undersea cables are routinely broken by accident (or, on one occasion, pulled up by Vietnamese fishermen looking for scrap metal), but data is automatically switched to others. There are rivals, or at least supplements, to GPS such as the EU’s Galileo. Air cargo has survived pilot and air traffic control strikes and an Icelandic ash cloud that closed north Atlantic airspace in 2010.Short of systemic challenges such as climate change and major global conflict, the global economy has proved remarkably resilient in the face of shocks. If the Houthis were expecting to hold globalisation to ransom through their Red Sea attacks, they’re failing. There are few indispensable keys to the corridors of global trade, and control of the Suez Canal does not appear to be one of [email protected] More

Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.If the entire (cooked) length of instant noodles sold around the world in a single year were laid out in a line, the resulting 6.2bn kilometre giga-noodle would stretch well beyond Pluto and into the depths of space. It is a fact as miserable as it is marvellous.Instant noodles sit among the most potent weapons ever devised in the unending struggle against starvation: a product that towers, among processed foods, at the extreme value end of the cost-per-calorie scale and which its makers now proudly classify as a piece of “social infrastructure”. They are a portable, resilient and long-lasting store of nourishment in times of need — from dire to impulsive and all points between. There is a reason that instant noodles have replaced cigarettes as the primary currency of the informal economy in dismally catered US prisons. This ready-to-eat grub, pioneered in the late 1950s to feed a ruined Japan in the protracted aftermath of war, takes the prize for being cheap and fast, but delicious. And yet, precisely because of those qualities, the rising demand for instant noodles can look a lot like a societal and economic red flag — a signal, especially in developed countries, that something has broken or is at least under severe strain. They are an index of the primacy of need over greed in straitened times.On one hand, if you can suspend judgment on the health risks associated with high-salt, ultra-processed foods, as most instant noodles are, there is something to celebrate in the relentless en-noodlement of the global diet. Particularly so for two Japanese companies, Toyo Suisan and Nissin Foods (whose founder invented the product), which have significant positions in a global market that analysts estimate to be worth north of $54bn. In 2022, according to the World Instant Noodles Association, humanity collectively bought a record 121bn servings of instant noodles — some 17 per cent more than in 2018. In countries as diverse as Nigeria, Bangladesh and Turkey, the surge has been far more acute, with increases ranging from 53 per cent to 425 per cent. That represents instant noodles doing their thing: rising from the shelves to provide affordable and durable calories to inflation-hit masses.The pandemic, with its lockdowns, disruption of food supply and the need for habitual non-cooks to feed themselves, was responsible for driving a good part of the 2020-2021 growth. But noodle consumption, as the sales figures and share prices of the Japanese duopoly testify, has continued to grow strongly in a post-Covid world. Where the red flags start waving, though, is among consumers in richer countries where — in a term chillingly used by Japan’s instant noodle makers — households have been pulled into a global cycle of “food product down-trading”. By the end of 2022, both the US and UK consumption of instant noodles had risen 14 per cent over five years. Japan, having entered an era of inflation after decades of deflation, now eats more of them than it did in 2018, even though its population is smaller.The empowerment of instant noodles as the favourite currency in US jails points (albeit in extreme terms) to the increasing gaps that the food is called upon to fill. In his 2022 book Orange Collar Labor, the academic Michael Gibson-Light uses the testimonies of inmates and staff to describe a prison system that, in part because of financial incentives for private operators to cut costs, no longer provides enough food to sustain an adult. The instant noodles, in this environment, become critical units of survival. Much like cash, says Gibson-Light, a single noodle packet can store value for some time, act as a standardised unit of account and be easily exchanged for services and goods between buyers and sellers. Outside prison, though, noodles are showing their strength in adversity. According to analysts who cover the noodle-makers, the pattern of buying has shifted revealingly in America’s sub-$1-per packet market. Here, where Toyo and Nissin command about 70 and 30 per cent shares respectively, they ensure that, even when prices do go up, they maintain a cheapness relative to other benchmarks such as tinned soup. US households have become increasingly sensitive to food-price rises and, in many cases as a matter of survival, are meeting calorie deficits with instant noodles. They buy in bulk — either from Amazon or from wholesalers like Costco — to take advantage of noodles’ resilience: unlike most other food, they can be bought today as a hedge against the risk that even noodle prices keep rising.The en-noodlement of the world is not, says a Nissin spokesman, a temporary boom. That is not great cause for joy. For all the resilience of the product, its rise is a signal of [email protected] More

Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.This article is an on-site version of our FirstFT newsletter. Sign up to our Asia, Europe/Africa or Americas edition to get it sent straight to your inbox every weekday morningGood morning. We have an exclusive report today that Joe Biden plans to intervene in Nippon Steel’s proposed purchase of US Steel. The move could threaten the $14.9bn deal and anger Japan, one of Washington’s closest allies.Biden will issue a statement expressing serious concern about the Japanese group’s proposed acquisition of the US manufacturing icon before Prime Minister Fumio Kishida arrives for a state visit in Washington on April 18, according to six people familiar with the decision.The White House has privately informed the Japanese government of the president’s decision, according to people with knowledge of the matter.One person familiar with the deliberations said it was “embarrassing” for an administration that talks about the importance of allies and particularly the US-Japan alliance to “send a signal of distrust regarding Japanese ownership of US companies” as Kishida prepares to visit.“The president knows all this, but sadly it looks like election year politics will win out,” the person said. Here’s why the deal could fall victim to the 2024 presidential campaign — plus the reaction from Japan’s business community. TikTok bill passes House: The US House of Representatives has voted overwhelmingly to approve a bill that would ban app stores from distributing TikTok if its Chinese owner does not divest ownership of the video-sharing platform.And here’s what else I’m keeping tabs on today:Economic data: The US reports retail sales and producer price inflation data for February.Results: Apple supplier Foxconn reports fourth-quarter earnings. Pakistan: The IMF begins a second and final review of the country’s $3bn standby arrangement, during which Islamabad will ask for a new longer-term funding deal (Reuters). Nato: Secretary-general Jens Stoltenberg holds a press conference to present his annual report for 2023.Five more top stories1. China is scrapping infrastructure projects as it struggles to reconcile austerity and economic growth. Beijing has ordered a dozen highly indebted areas to curb infrastructure spending as it tries to unwind a decade-long investment binge many believe is unsustainable. But the austerity drive may make achieving the government’s ambitious 5 per cent growth target even more difficult.2. Exclusive: The US has held secret talks with Iran this year in a bid to convince Tehran to use its influence over Yemen’s Houthi movement to end attacks on ships in the Red Sea, according to US and Iranian officials. The indirect negotiations took place in Oman in January and were the first between the foes in 10 months. 3. Japanese companies including Honda, Nippon Steel and ANA Holdings have granted workers their biggest pay rise in more than three decades. The pay negotiations have been closely followed by investors this year as robust wage growth is crucial for the Bank of Japan to gain enough confidence to begin unwinding its ultra-loose monetary policy measures.4. Ukraine has stepped up drone strikes on oil refineries deep inside Russia. In a second day of assaults on Russian energy infrastructure, explosions were confirmed on sites in the country’s heartlands such as Ryazan, Kstovo and Kirishi. The attacks come amid growing frustration in Ukraine with the hesitant approach western powers have taken to targeting Moscow’s energy revenues. 5. Cathay Pacific reported its highest annual profit in more than a decade as strong travel demand buoyed the Hong Kong flag carrier’s earnings. The airline posted net profit of HK$9.8bn (US$1.3bn) for the year, with its chair declaring it had “finally left the Covid-19 pandemic behind” after three years of losses.News in-depth© APUkrainian soldiers on the frontline are warning of exhaustion and low morale as the military struggles with personnel shortages. A new mobilisation law — due to be put to a parliamentary vote on March 31 — seeks to update the country’s legal framework ahead of a probable recruitment wave this year in which up to 500,000 people could be drafted. But the law is proving controversial.We’re also reading . . . Chart of the dayA flood of solar panels made in China, the dominant solar equipment supplier, is driving prices to record lows in the US. It has been a boon for renewable energy developers but a threat to solar manufacturers trying to create a domestic supply chain for the country’s fastest-growing source of electricity generation.Take a break from the newsThe power of place, women launching start-ups, and the good, bad and ugly of management are among the topics of business books we are reading this month.© FT montageAdditional contributions from George Russell and Gordon Smith Recommended newsletters for youWorking It — Everything you need to get ahead at work, in your inbox every Wednesday. 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This article is an on-site version of our Disrupted Times newsletter. Sign up here to get the newsletter sent straight to your inbox three times a weekToday’s top storiesRussian President Vladimir Putin said his country was prepared for a nuclear war and that testing could resume on a new generation of weapons. Ukraine has stepped up drone strikes on oil refineries deep inside Russia, in what officials say is an intensifying effort to hit the country’s economy. The UK economy returned to growth in January as the services sector fuelled a 0.2 per cent rise in GDP. The growth raises expectations of the UK coming out of recession in the first quarter, giving a much-needed boost to embattled Prime Minister Rishi Sunak.Sunak is making an attempt to block the takeover of the Telegraph by Abu Dhabi-backed RedBird IMI by proposing changes to legislation currently going through parliament to, in effect, prevent any foreign state from owning or having influence or control over a British newspaper. For up-to-the-minute news updates, visit our live blogGood evening.TikTok, shipbuilding and the solar industry are the latest flashpoints in the simmering US-China trade tussle, which is rapidly moving up the political agenda ahead of America’s presidential election in November.The House of Representatives today voted overwhelmingly to approve a bill that would ban American app stores from distributing TikTok unless its Chinese owner ByteDance divested the video-sharing platform. President Joe Biden said he would support the bill, which now passes to the Senate. Proponents argue that the app could be used to exploit Americans’ data or become a national security risk by allowing backdoors to be built into US networks.The American solar industry, meanwhile, is in uproar over cheap Chinese solar panels, which have helped halve global prices in the past year: a boon for renewable energy developers but a threat to domestic manufacturers as they try to construct a native supply chain fit for the green transition. China doubled production capacity last year and now makes three times more panels than global demand, according to the International Energy Agency and Wood Mackenzie. In response, North American manufacturers say they are cutting expansion plans, despite the generous incentives on offer from Biden’s Inflation Reduction Act, the landmark US climate law. “The IRA subsidies are hugely lucrative, but they’re still not enough to compete against cheap imports,” said one analyst, adding that a “new protectionist measure” would be necessary to make US manufacturing competitive. The chipmaking industry has been the one of the most high-profile examples of rising tensions between the two countries, but the fallout is affecting the sector worldwide. South Korea’s Samsung and SK Hynix, the world’s leading memory chipmakers, have stopped selling used chipmaking equipment lest they fall foul of US export restrictions, with used machines being stored in warehouses instead of being put on the secondary market. US help for the Philippine chip sector is the latest move from Washington as part of efforts to add more economic engagement to its military and security partnerships in the region.It is shipbuilding, however, that has become the latest and potentially most important battleground.The United Steelworkers union has hit out at Beijing’s “predatory” trade practices with claims Chinese shipbuilders have benefited from protectionist policies such as state-run bank loans and tax breaks. Over the past two decades, China has gone from producing 12 per cent of global commercial ships by tonnage to more than 50 per cent in 2023, according to one maritime consultancy. It also dominates shipping logistics, giving its Logink supply chain platform free to ports around the world.As Rana Foroohar’s Big Read explains, the case has dramatic global implications, not just in fuelling trade tensions but increasing the focus on Beijing’s growing military might and the massive commercial shipping industry that underpins it. It also, says Foroohar, raises questions about America’s ability to reindustrialise in strategic sectors and its ability to continue to police global shipping lanes when it no longer has the industrial capacity to build its own ships.Need to know: UK and Europe economyUK wage growth continued to slow in the three months to date, according to official data that confirmed the Bank of England’s view that inflationary pressures were easing. The UK cost of living crisis has not gone away, however, with new data showing mortgage arrears hitting a 7-year high and the water consumer watchdog warning that suppliers’ plans to raise bills by up to 70 per cent over the next five years were “unaffordable” for most households in England and Wales. The UK’s Competition and Markets Authority is taking aim at the private equity-dominated veterinary market. The sector has consolidated rapidly over the past decade and concerns have grown that pet owners may be overpaying for medicines.MPs launched a probe into the health risks from abandoned Welsh mines after an FT investigation highlighted the dangers from harmful metals leaking into the environment from some sites.Brussels is set to bring in strict rules on food packaging with a de facto ban on the use of most plastic recycled outside the EU after a last-minute push by France to amend a flagship law.Need to know: Global economyUS inflation unexpectedly rose from 3.1 to 3.2 per cent in February, posing a fresh problem for the Federal Reserve, which next week decides whether to cut rates from their 23-year high of 5.25 per cent to 5.5 per cent.Haiti’s Prime Minister Ariel Henry said he would resign once a transitional council had been created to run the Caribbean country after it was overrun by street gangs. Somali pirates seized a Bangladeshi ship carrying coal to the United Arab Emirates, underlining the growing risks for commercial shipping as global naval forces focus on the threat from Houthis in the Red Sea area.China is scrapping a clutch of infrastructure projects in indebted regions as it tries to balance a need to save money with its target for economic growth. The future of “communist capitalism” is the subject of the latest column from chief economics commentator Martin Wolf, who tackles the question: Is Xi-ism killing Deng-ism?You are seeing a snapshot of an interactive graphic. This is most likely due to being offline or JavaScript being disabled in your browser.Divisions between rich and poor countries on the sharing of genomic data on pathogens and funding for health systems during emergencies are threatening progress on a global pandemic treaty. Nigeria has been hit by a wave of violent food looting as its economic and security crisis deepens. Food inflation passed 35 per cent at the start of the year. Need to know: BusinessApple bowed to Brussels’ tech crackdown with approval for iPhone apps to be downloaded from developers’ websites rather than solely from the company’s App Store. US tech start-ups have cut back equity packages for new hires as they adapt to a prolonged downturn. UK-based chip designer Arm unveiled its first chips for self-driving cars as it seeks growth beyond the mobile processors for which it is known. Electrification and assisted or autonomous driving systems are increasing the importance of software — and the chips to run it — for carmakers.Zara owner Inditex, the world’s largest fashion retailer, reported a strong start to the first quarter after managing to lift profits and prices in 2023. The Spanish company has been shifting its focus to more stylish designs in its long-running battle with Swedish rival H&M.As we highlighted in Monday’s DT, stock markets are having a bit of a moment. So much so that a whole “risk reset” is under way as hopes grow that central banks have succeeded in taming inflation without triggering a downturn.Cathay Pacific recorded its highest annual profit since 2010 as the Hong Kong airline enjoyed a surge in demand following the end of pandemic restrictions.The global art market hit the buffers in 2023, falling 4 per cent to a three-year low of $65bn, according to a new report that found even the wealthy “are not immune to disruptive financial, social or political changes”.The World of WorkJapanese workers have secured their biggest pay rise in more than three decades, bolstering the case for the Bank of Japan to begin raising interest rates. Real wages in the country had stagnated since the late 1990s.EU ministers ratified rules that will help determine the employment status of about 28mn “gig economy” workers, allowing them to benefit from labour rights such as paternity leave and holiday pay.What do the best communicators have in common and how important is better listening to succeeding in the workplace? Listen to the new Working It podcast.Some good newsSafe spaces and sponsorship programmes are providing vital schooling to displaced children and those in war-affected cities.Recommended newslettersWorking it — Discover the big ideas shaping today’s workplaces with a weekly newsletter from work & careers editor Isabel Berwick. Sign up hereThe Climate Graphic: Explained — Understanding the most important climate data of the week. Sign up hereThanks for reading Disrupted Times. If this newsletter has been forwarded to you, please sign up here to receive future issues. 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Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.The gap in health, education and wealth between the world’s most and least-developed economies has reached its highest level in almost a decade, as high levels of post-pandemic debt limited poorer countries’ ability to invest.The latest Human Development Index, a UN initiative, signals that the coronavirus pandemic ended two decades of convergence between the world’s most and least developed economies.The development gap between the top and bottom groups of countries last year returned to the same levels as 2015, widening at a record pace over the preceding two years, according to the report released on Wednesday by the UN’s Development Programme.The gap between countries that score low on the development index, such as Nigeria and Pakistan, and the medium group, which includes Kenya and India, also increased sharply, rising 17 per cent between 2021 and 2023.You are seeing a snapshot of an interactive graphic. This is most likely due to being offline or JavaScript being disabled in your browser.UNDP administrator Achim Steiner said the widening inequality reflected a lack of fiscal space in many developing countries to address the downturn after the cost of Covid-19 left them burdened with debt.“Dozens of countries in the developing world are paying more servicing the interest on their debt than they have available to spend on education or health,” he said. “We now see very serious divergence, particularly for the bottom 20-30 developing countries. We are not on the trajectory we were on 10 years ago.”All members of the OECD group of developed economies recovered to 2019 levels in last year’s index, but some 18 of the 46 least developed countries still scored below their pre-pandemic levels.Slower income growth drove the divergence. Average gross national income per capita grew at twice the rate for OECD members as it did for least-developed countries, rising 4 per cent between 2019 and 2023. The fastest wealth accumulation occurred in developing countries in east Asia and the Pacific, however, where gross national income per capita rose 15 per cent over the past four years, while average wealth in sub-Saharan Africa fell 1 per cent.You are seeing a snapshot of an interactive graphic. This is most likely due to being offline or JavaScript being disabled in your browser.Overall, the global HDI scores reached a record high in 2023, but remained three years behind where they were projected to have been without the pandemic.Across almost all regions, health and education outcomes have recovered, according to the index, but slower progress in the lowest-ranked countries has extended the gap with wealthier countries.But Norbert Schady, chief economist for human development at the World Bank, said the effect on education might be greater than the report suggested. That is partly because, for example, the development index looks at school attendance rather than learning outcomes.“The biggest effects [were] on very young children in terms of their cognitive and language development and . . . massive learning losses that were highly correlated with the extent to which schools were closed for long periods,” he said.“There is likely some recovery, but nowhere near the amount it would take to get these children back on track. The effects of this will ripple out for many years, possibly even for decades.”You are seeing a snapshot of an interactive graphic. This is most likely due to being offline or JavaScript being disabled in your browser.Education spending made up only 3 per cent of pandemic stimulus packages on average and less than 1 per cent in poorer countries, according to the World Bank.Increased inequality has led to greater polarisation in societies and support for authoritarian governments, according to Steiner. He said this polarisation was fuelling a “dangerous” narrative supporting reductions to global trade and interdependence. “We’re living through an age where global interdependencies are being reshaped, but they’re actually more intense than ever before,” he said. “This gridlock is paralysing us when it comes to challenges such as climate change. If we’re not careful, it could really throw the world backwards.” More