Aurelia Butler

(Reuters) – A look at the day ahead in Asian markets from Jamie McGeever, financial markets columnist.The cold reality of ‘higher for longer’ interest rates that cooled investor sentiment on Wednesday will lend a cautious tone to Asian trading on Thursday, with investors also wary of potential action from Tokyo and Beijing on exchange rates. On the regional data front retail sales and consumer confidence from Japan and Australian retail sales take center stage, while investors with exposure to Vietnam will be paying close attention to second quarter GDP growth figures from Hanoi.The broader narrative running through markets on Wednesday was more downbeat than Tuesday – and less coherent – after the leaders of the G4 central banks sent hawkish signals from the European Central Bank’s annual jamboree in Sintra, Portugal.Wall Street struggled under the weight of rising U.S. rate expectations, the dollar rose and Treasuries rallied, and the U.S. yield curve inversion deepened a bit. So far, so ‘risk off’.But U.S. equity market volatility fell, oil jumped, Apple shares (NASDAQ:AAPL) climbed to a new all-time high, and other mega tech stocks rose too. Asian tech may rise in sympathy on Thursday, but the sector is one of the major sources of U.S.-Sino tensions – U.S. officials are considering tightening an export control rule designed to slow the flow of artificial intelligence chips to China by clamping down on the amount of computing power the chips can have. On the macro front, another plunge in Chinese industrial profits was yet another reminder of the difficulties the world’s second largest economy is experiencing. Annual profits at China’s industrial firms extended a double-digit decline in the first five months as softening demand squeezed margins.The economy appears to be losing steam on many fronts. Further monetary easing could be in the cards and if it is, the yuan is likely to inch closer to a fresh 15 and a half year low through 7.30 per dollar. Investors are wondering exactly where Beijing stands on the yuan right now, after acting to support the currency for the first time in nearly eight months on Tuesday, then allowing it to slide again on Wednesday.The yen, meanwhile, fell to a new seven-month low on Wednesday near 145.00 per dollar. Many analysts say yen-buying intervention from Japanese authorities between 145.00 and 150.00 per dollar is increasingly likely.Both the yuan and the yen are historically weak. If one declines, authorities in the other country could be minded to let their currency slide too.Here are key developments that could provide more direction to markets on Thursday:- Japan retail sales and consumer confidence (May)- Australia retail sales (May)- Vietnam GDP (Q2) (By Jamie McGeever) More

Good morning. The world’s top central bank chiefs have signalled their readiness to increase interest rates further and keep them high, as they warned tight labour markets are still pushing up wages and prices.The heads of the US Federal Reserve, the European Central Bank and the Bank of England warned at a conference in Sintra, Portugal, that more action may be needed to bring inflation down towards targets of about 2 per cent despite some economists’ predictions that further rate rises could trigger a recession or financial crisis.“Although policy is restrictive, it may not be restrictive enough and it has not been restrictive for long enough,” Fed chair Jay Powell told the much-watched central bankers’ conference.“The labour market is really pulling the economy,” he added, signalling the Fed could increase interest rates at its next two meetings after pausing this month.Frederik Ducrozet, an economist at Pictet Wealth Management, said the bankers “seem ready to tolerate a mild recession if that’s the price to pay” to hit their targets. IMF: The fund’s deputy director Gita Gopinath warned the conference that central banks may need to sacrifice their fight against inflation if higher rates triggered a systemic financial crisis. Read Gopinath’s interview with the FT. Italy: Italian prime minister Giorgia Meloni lashed out against the European Central Bank’s repeated interest rate rises, saying its “simplistic” approach to combating inflation was likely to hurt European economies more than help them.Here’s what else I’m keeping tabs on today:Economic data: The final first-quarter GDP figures are due in the US.United Nations: Member states will vote on the creation of a first-of-its-kind institution to investigate the fate of at least 102,000 people who have disappeared during Syria’s 12-year conflict.Wildfire smoke returns in US: Haze from Canadian wildfires has enveloped the US Midwest, placing three major metropolitan areas among those with the worst air quality globally.Five more top stories1. Vladimir Putin has moved to shake up Russia’s security services in the wake of the Wagner group’s failed insurrection, rewarding loyalists with promotions and freezing out figures sympathetic to the paramilitary organisation’s leader Yevgeny Prigozhin. Read more about Putin’s efforts to re-establish control over the security services.War in Ukraine: Ukraine’s defence minister hit back at doubters over the progress of its summer counteroffensive, insisting that the “main event” was still to come. Read the FT’s interview with Oleksiy Reznikov. 2. The Biden administration is weighing new export controls on chips for artificial intelligence. The update by the US commerce department to sweeping export controls introduced in October could make it harder for companies such as Nvidia and Advanced Micro Devices to sell advanced chips to China. 3. Protests have broken out in several Parisian suburbs after police shot and killed a 17-year-old driver who tried to evade traffic control officers. The incident immediately sparked strong emotions after a video taken by an onlooker was posted on social media. Read the full story.4. The largest US banks would lose $541bn in a hypothetical doomsday economic scenario but still have more than enough capital to absorb the losses, according to annual stress tests conducted by the Federal Reserve. Read more about the annual Fed stress tests. 5. Sri Lanka’s cabinet has approved a proposal to restructure the bankrupt country’s domestic debts of $42bn, a controversial decision that the government says is necessary to comply with the terms of its IMF bailout. The government has declared holidays until Tuesday in order to prevent a run on banks following the decision. The Big Read

Gibraltar voted overwhelmingly against Brexit © Claudia Wiens/FT

A power struggle in Spain threatens to dash Gibraltar’s hopes for closer ties with the EU. The UK territory, which voted overwhelmingly against Brexit, is racked by fears of a hard border with its neighbour that would end the ease of movement to which workers have grown accustomed.We’re also reading and listening to . . . The case for a digital euro: While many harbour concerns over privacy, having a new way to pay throughout the eurozone would definitely help consumers, writes Mairead McGuinness.AI salesbots: Companies are using AI to make more sophisticated sales methods that are potentially exploitative, writes Brooke Masters.Unhedged podcast 🎧: The FT’s Ethan Wu and Katie Martin give three reasons why Japan’s stock market rally is for real — and a few reasons to worry. Free to listen. Want more from Unhedged? FT premium subscribers can click here to get the weekday newsletter. Not a premium subscriber? Try Unhedged for free for 90 days.Chart of the dayChinese companies are rushing into the country’s energy storage sector, spurred by massive state spending on President Xi Jinping’s plan to achieve energy independence. Goldman Sachs forecasts that battery technologies will be part of a more than $7tn infrastructure investment opportunity through to 2040. Take a break from the newsWhat is it about certain pieces of clothing that makes us return to them again and again? These stylish people share their secrets to finding go-to garments that have personal meaning.

Menswear designer Charlie Casely-Hayford © Photographed for the FT by Lily Bertrand-Webb

Additional contributions by Grace Ramos and Gordon Smith More

(Reuters) -Apple’s stock climbed to a record high close on Wednesday and was on the cusp of a $3 trillion market capitalization.The iPhone maker’s stock rose 0.6% to end the day at $189.25, putting Apple (NASDAQ:AAPL)’s market value at $2.98 trillion, according to Refinitiv data. It was the second straight record high close for Apple’s shares.Apple has yet to end a trading session with a stock market value above $3 trillion. It briefly peaked above $3 trillion in intra-day trading on Jan. 3, 2022 before closing the session just below that mark.The latest gains in shares of the world’s most valuable company follow strong rebounds this year from several of Wall Street’s technology-related heavyweights, fueled by bets that the Federal Reserve is nearing the end of its campaign of U.S. interest rate hikes, and by optimism about the potential for artificial intelligence.”There hasn’t really been any new information fundamentally that would be supportive of the stock move,” said Thomas Martin, Senior Portfolio Manager at Globalt Investments. “What you’re left with is, you know, the market itself.”Apple has jumped 46% in 2023, while Nvidia (NASDAQ:NVDA) has surged 185%, making it the first chipmaker with a stock market value over $1 trillion. Tesla (NASDAQ:TSLA) and Meta Platforms have more than doubled this year, and Microsoft (NASDAQ:MSFT) has added 40%.Apple’s approach toward its $3 trillion milestone follows the June 5 launch of a pricey augmented-reality headset, its riskiest bet since the introduction of the iPhone more than a decade ago.As well, Apple’s most recent quarterly report in May showed a drop in revenue and profits, but still beat analysts’ expectations. Along with a steady track record of stock buybacks, those financial results reinforced its reputation among investors as a safe investment at a time of global economic uncertainty.Recent gains in Apple’s shares have outpaced analysts’ estimates for the company’s future earnings. The stock is now trading at about 29 times expected earnings, its highest multiple since February 2022, according to Refinitiv data. More

(Reuters) – Food insecurity is rising in the U.S. as the end of pandemic-era aid and higher food costs strain low-income Americans, according to data released on Wednesday by the U.S. Census Bureau and two surveys from anti-hunger groups.About 26.5 million Americans reported sometimes or often not having enough to eat between June 7 and June 19, according to the Census’s latest Household Pulse Survey – up 4.4% from last month’s survey and 12% from June 2022. The number of people who reported picking up free groceries in June was 10.9 million, down about 10% from May but up 22% from June 2022, according to the data.Most food aid programs tied to the COVID-19 pandemic, like a nationwide waiver that allowed schools to temporarily serve meals for free, have ended. Poor households have also seen a decline in benefits from the Supplemental Nutrition Assistance Program (SNAP) program, after a pandemic provision that expanded benefits ended in March. Propel, a company that provides financial services to low-income people, found in a survey that 31% of its users reported relying on friends and family for food in June, up from 19% in February, before the expanded benefits ended.The USDA last week committed $2.3 billion to food purchases for schools and emergency food providers like food banks.Food costs are up 6.7% over last year, according to the most recent data from the Bureau of Labor Statistics. A report released Wednesday by the Food Research and Action Center (FRAC), an anti-hunger advocacy group, said the school meals waiver had helped ease hunger.“The return to pre-pandemic operations results in too many children missing out on the nutrition they need,” Luis Guardia, president of FRAC, said in a statement.The number of students getting school lunch fell 7% after the waiver ended, according to FRAC. More