Aurelia Butler

UK shop price inflation slowed in June helped by a second consecutive monthly decline in the growth of food prices, according to the latest industry data.The cost of shop items rose at an annual rate of 8.4 per cent this month, down from 9 per cent in May and below the three-month average of 8.7 per cent, figures published on Tuesday by the British Retail Consortium showed.The easing was helped by a slow down in food price growth — where inflation has been particularly acute — to 14.6 per cent in June from 15.4 per cent in the previous month and down from an all-time record high of 15.7 per cent in April.Sharply rising food costs and high energy prices in the wake of Russia’s full-blown invasion of Ukraine last year have been the main drivers of the cost of living crisis, with inflation in the UK remaining stubbornly high.“Households up and down the country will welcome the easing of shop price inflation in June,” said Helen Dickinson, chief executive of the British Retail Consortium.She said fresh food prices were a key driver of the slowdown as retailers cut the cost of many staples, including milk, cheese and eggs. The annual growth of fresh food prices in June was 15.7 per cent, down sharply from 17.2 per cent the previous month. The price of ambient food inflation — items that can be stored at room temperature — fell slightly to 13 per cent, down from 13.1 per cent in May.“If global supply chain costs continue to fall, we may now be past the peak of [food] price increases,” said Mike Watkins, head of retail and business insight at NielsenIQ, which helps compile the data.

Official food and non-alcoholic beverages inflation fell to 18.4 per cent in May from 19.1 per cent in the previous month, a further decline from the 45-year high of 19.2 per cent reached in March. The BRC figures suggest the slowdown will continue this month.The BRC data showed retailers were discounting on clothing and electrical goods, helping non-food inflation ease 0.4 percentage points to 5.4 per cent in June.But prices remain high by historical standards and Watkins said he expected purchasing behaviour for the rest of this year was “still likely to shift towards essential needs with discretionary consumption being deprioritised or delayed”.Data published last week showed that household goods sales volumes were 7.6 per cent below their pre-pandemic February 2020 levels, as consumers cut back on purchases in response to higher prices. More

NEW YORK (Reuters) – Investors are watching a large hedged-equity fund’s quarterly refresh of its options positions and quarter-end rebalancing by portfolio managers to potentially influence U.S. stock moves as the first half of the year winds down this week. The nearly $16 billion JPMorgan (NYSE:JPM) Hedged Equity Fund, which holds a basket of S&P 500 stocks along with options on the benchmark index, is expected to roll its options positions on Friday.While the trade is anticipated by many market participants, it can exacerbate or suppress daily stock market moves, especially during times of poor market liquidity, analysts said.For now, the trade may be helping suppress volatility in stocks. That is because the March 31 refresh of the fund’s positions involved about 120,000 S&P 500 options contracts set to expire on June 30, including the sale of nearly 40,000 S&P 500 options contracts with a strike price of 4,320, just below where the index is trading today.With the S&P 500 just above the 4,320 level, the sold call options mean options dealers – in this case large banks or financial institutions – are induced to buy equities when the index drops underneath that level and sell when it moves above it, said Brent Kochuba, founder of options analytics firm SpotGamma. That may help curb market volatility, analysts said.Meanwhile, there could be a fair amount of buying and selling in the markets in the last days of the quarter as money managers, pension funds and other investors adjust their asset allocations to account for the quarter’s moves in stocks and bonds. The MSCI All-World index, a gauge of stocks across the globe, is up nearly 4% for the quarter, on pace for its third straight quarterly gain, while the Bloomberg Global Aggregate bonds index is down about 1%. JPMorgan strategists earlier this month estimated the rebalancing flows could total about $150 billion worth of equity selling and a similar amount of bond buying – factors that may already be impacting markets over recent sessions. While equity gyrations have on the whole been muted, with the Cboe Volatility Index falling to a three-year low last week, some market participants expect a measure of turbulence in coming days. “There might be little bit of noise,” said Michael Purves, chief executive officer at Tallbacken Capital Advisors. “The rest of the week is going to be choppy and weird and probably not that significant in terms of signaling broader trends.” More

WASHINGTON (Reuters) – The White House on Monday divvied up $42 billion among the nation’s 50 states and U.S. territories to make access to high-speed broadband universal by 2030, as it launched a new publicity campaign for President Joe Biden’s economic policies.The funding under the Broadband Equity Access and Deployment Program was authorized by the $1 trillion 2021 infrastructure law Biden championed. The spending will be based on a newly released Federal Communications Commission coverage map that details gaps in access.Texas and California – the two most populous U.S. states – top the funding list at $3.1 billion and $1.9 billion, respectively. But other, less populous states like Virginia, Alabama and Louisiana cracked the top 10 list for funding due to lack of broadband access. These states have large rural areas with less internet connectivity than their major cities.”It’s the biggest investment in high-speed internet ever. Because for today’s economy to work for everyone, internet access is just as important as electricity, or water, or other basic services,” Biden said in a White House address on Monday.The awards range from $27 million to U.S. territories like U.S. Virgin Islands to over $3.3 billion for Texas, with every state receiving a minimum of $107 million. The announcement kicks off the second leg of Biden’s tour highlighting how legislation passed when his Democratic Party controlled Congress will affect average Americans, as his 2024 re-election bid gears up. As part of the sales pitch, Biden is also set to give what White House officials describe as a major economic speech on Wednesday in Chicago, laying out so-called “Bidenomics,” according to a memo on Monday from senior advisers Anita Dunn and Mike Donilon to congressional Democrats and other allies.The 2024 election will in part be seen as a referendum on Biden’s handing of the economy. Job creation and low unemployment are the positives while elevated inflation and the knock-on effect of higher interest rates have stoked fears of a recession. More than half – 54% – of Americans disapprove of how Biden is handing his job, while just 35% of respondents approved of his stewardship of the economy, according to a Reuters/Ipsos poll conducted earlier this month. Democrats lost control of the House of Representatives in the 2022 midterm elections.The administration estimates there are some 8.5 million locations in the U.S. that lack access to broadband connections.Broadband companies such as Verizon (NYSE:VZ), Comcast (NASDAQ:CMCSA), Charter Communications (NASDAQ:CHTR) and AT&T (NYSE:T) have been reluctant to provide access to low-population, rural communities because the investments are expensive and the regions do not offer a lot of subscribers. The lack of broadband access drew attention during COVID-19 shutdowns that forced students into online schooling.States are expected to submit initial plans later this year that will unlock 20% of the funding. Once the plans are finalized, which could take to 2025, the government will release the remaining money. More

Around $274 million went to the economic reform program, which is one installment in the more than $1 billion Costa Rica has received from the IMF under the arrangement, the fund said.Another $245 million goes to the resilience and sustainability arrangement.The Central American country met its fiscal targets by large margins, Kenji Okamura, acting chair of the IMF board, said in a statement.”While there is scope for further monetary easing in 2023, policies should remain attentive to risks to the inflation outlook,” he added.The IMF pegged Costa Rica’s real gross domestic product (GDP) growth for this year at 3.0% and at 3.2% in 2024. More

(Reuters) – A look at the day ahead in Asian markets from Jamie McGeever, financial markets columnist.Asian markets on Tuesday are set to open on the defensive, pressured by worries over inflation and ‘higher for longer’ interest rates globally more than fallout from the brief uprising by Russian mercenaries against the Kremlin.Wall Street closed in the red on Monday – the Nasdaq shed more than 1% for the third trading day in four – and the U.S. yield curve inversion accelerated to near-historic levels. But inflation and policy concerns are driving sentiment more than geopolitical fears. The increases in traditional ‘safe haven’ assets like gold, bonds, the yen, Swiss franc and U.S. dollar on Monday were small, in some cases negligible. The Bank for International Settlements on Sunday called for more rate hikes, warning the world economy is at a crucial juncture in the fight against inflation. The International Monetary Fund’s Gita Gopinath said on Monday investors may be overly optimistic on the speed and cost of taming inflation. With no major Asian economic indicators, policy decisions or policymaker speeches scheduled for Tuesday, investors will probably pick up from where U.S. markets left off on Monday.The U.S. 2-year/10-year yield curve inverted further on Monday, to 104 basis points, which is only 6 bps away from the historic inversion of 110 bps in the immediate aftermath of the U.S. regional banking shock in March. An inverted curve has preceded every U.S. recession in the past half century. Is this time different? So far, it would appear so, although a Fed paper on Friday concluded that restrictive policy “may contribute to a marked slowdown in investment and employment in the near term.” In the corporate world, meanwhile, Japan is stepping up efforts to bolster its chip industry, with a government-backed fund on Monday agreeing to buy semiconductor materials maker JSR Corp for about $6.4 billion.The move by Japan Investment Corp (JIC), overseen by the trade ministry, is the latest in a series of increasingly government steps to try to regain Japan’s lead in advanced chip production and maintain its edge as a maker of materials and tools used in their manufacture.It also reflects a broader battle across the continent as countries seek to boost their presence in the rapidly evolving tech sector, especially artificial intelligence (AI), and exert control over their supply chains. A key part of this race is exchange rates. All else equal, a cheaper currency is more likely to attract overseas investment and capital inflows, and boost exports. Intra-Asian FX moves are crucial, but from a global perspective Japan’s yen has weakened against the dollar so far this year significantly more than its regional counterparts.Here are key developments that could provide more direction to markets on Tuesday:- U.S. consumer confidence (June)- Canada CPI inflation (May)- ECB, global policymaker gathering in Sintra, Portugal (By Jamie McGeever; Editing by) More