Aurelia Butler

The new head of the world’s biggest climate finance institution has warned that without clean energy investment in developing nations the US and Europe will be “hit”, regardless of their own policy efforts at home.Mafalda Duarte, the Portuguese national who will take over the UN-backed $12bn Green Climate Fund next month, spoke to the FT about the challenges ahead as leaders gather in Paris this week to discuss reform of climate finance.“If we don’t have investments in developing countries, forget about the climate,” said Duarte. “If the Indias, the Africas, the Indonesias, the Chinas — if they don’t move, then it doesn’t matter what we do in developed countries . . . it is going to hit the US, it is going to hit Europe, it doesn’t matter.”Wealthy countries have been scrambling to meet financing commitments made at previous UN climate talks. Out of the $100bn for an adaptation fund promised at the UN summit in Copenhagen 14 years ago, only $83.3bn had been raised by the target date of 2020, according to the OECD.More recently, rich countries have pledged money to poorer nations to help shift their energy systems from coal to renewable sources through the Just Energy Transition Partnership. But the vast sums of money needed to tackle the climate crisis have led countries including the US and Europe to lean more heavily on multilateral lenders. Governments have urged the World Bank to expand its remit to tackle “global public goods” such as pandemic preparedness and climate. Duarte questioned whether leaders in the developed world were doing enough to create the political conditions for money to be invested overseas. “People talk about the global public goods dimension of this, but are we doing enough to have a good amount of the population understand what this means? It means you have to invest elsewhere and not just in your own country. “You see the news, we are going to hit 1.5C [rise in global temperatures] before 2027,” said Duarte. “You need that group of global leaders who have internalised that this is existential, and act accordingly.” 

Last December, the US Congress pledged just $1bn to help poorer nations tackle climate change, falling short of President Joe Biden’s promise that Washington would spend more than $11bn annually by 2024, even as it passed a huge domestic clean energy spending package.Duarte also called for more female leaders as she prepared to take over the GCF, which was embroiled in a sexual harassment scandal in 2020. “The culture of the organisation is one of my priorities,” said Duarte, who comes to the role after running the $10bn Climate Investment Fund. She was speaking before the latest allegations by female delegates of intimidation or harassment by their male counterparts at this month’s UN climate conference in Bonn, Germany.Mexico, the US, UK, Germany, Peru and Canada are among two dozen countries that wrote to the UN last week calling for action to “ensure a harassment-free environment”.The letter, seen by the Financial Times, calls for organisers to “pay particular attention to the way women negotiators are being treated in [UN Framework Convention on Climate Change] premises, inside and outside of negotiation rooms, ensuring that all participants feel part of a respectful and safe work environment”. 

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Duarte said she hoped to see “more and more” women in leadership roles in the climate world, and cited research that found increased female empowerment was linked to better climate outcomes. “We do know that women make different decisions . . . why is it in general that when women have disposable income they invest more in education and health than men?” said Duarte.“I’m not saying that we don’t have a very generous group of men up there, who see [climate change] as an existential threat,” said Duarte. “But I am confident if we saw more women we might see a more assertive response to what is an existential threat to our children.” More

UK grocery price inflation eased for a third consecutive month in June, with new data suggesting it might have peaked, according to research company Kantar.The annual pace of supermarket price increases eased to 16.5 per cent for the four weeks to June 11, down from 17.2 per cent the previous month. The figure was below the recent high of 17.5 per cent registered in March and the lowest this year, the new sector data showed. Fraser McKevitt, head of retail and consumer insight at Kantar, said: “Price rises are now being compared to the increasing rate of grocery inflation seen last summer, which means that it should continue to fall in the coming months, a welcome result for everyone.”Wholesale energy and food prices soared in the summer last year following Russia’s invasion of Ukraine.Susannah Streeter, head of money and markets at Hargreaves Lansdown, said the data provided “fresh signs” that inflation would retreat further as “growth in wholesale commodity prices paid by companies slows sharply”. But, she added, food costs would stay “stubbornly high”.The Office for National Statistics reported last month that inflation of food and non-alcoholic beverages eased marginally to 19.1 per cent in April from a 45-year high of 19.2 per cent registered in the previous month. Economists polled by Reuters expect inflation to ease to 8.4 per cent in May, from 8.7 per cent in April, when data is released on Wednesday.However, grocery inflation has prompted shoppers to turn to cheaper supermarkets and own-labels. Kantar reported that prices were rising fastest for foods such as eggs, ambient cooking sauces and frozen potato products.“Savvy shoppers have been continuing to swerve the full force of price increases, with many switching to the cheapest own-label lines,” said McKevitt. Spending on those ranges have rocketed 41 per cent.Cheaper supermarkets such as Aldi and Lidl reported annual growth rates in spending of more than 20 per cent, more than double that of the grocery sector, pushing Aldi’s market share to a record high of 10.2 per cent. Sales at the more expensive Morrisons, Waitrose and Ocado largely stagnated. Streeter expected a meaningful reduction in prices across the aisles to be “a long way off”. She added that “shopping safaris, where customers cherry-pick the best prices from multiple stores, looks set to stay the trend in the grocery market”. More

1. China cuts interest ratesThe People’s Bank of China cut its key lending benchmarks on Tuesday, in the latest sign that the country’s authorities are concerned that the post-pandemic recovery in the world’s second-largest economy is losing momentum.The one-year loan prime rate was lowered by 10 basis points to 3.55%, while the five-year LPR was cut by the same margin to 4.20% – the first such reductions in 10 months.The PBOC had also lowered short- and medium-term policy rates last week.However, these moves received a lukewarm reception as concerns about the country’s property market had meant that some within the market had expected more.China’s cabinet met on Friday to discuss measures to spur growth in the economy, and while nothing fresh emerged from these discussions, wider stimulus measures are widely expected in the fullness of time.The weakening Chinese economy could also be behind the apparent thawing in relations between Beijing and Washington – the last thing needed at this point would be a trade war with a major export market!Secretary of State Antony Blinken met with President Xi Jinping on Monday, with the Chinese leader calling the progress “very good”.Although little in concrete was agreed upon, the two sides are still talking, with Chinese Foreign Minister Qin Gang now likely to visit Washington in the next few months.2. Alibaba CEO to head up cloud unitThe importance of Alibaba’s cloud unit was laid bare Tuesday, with the Chinese e-commerce giant announcing earlier Tuesday that current chairman and CEO Daniel Zhang will step down after eight years to front up the key unit.“This is the right time for me to make a transition, given the importance of Alibaba Cloud Intelligence Group as it progresses towards a full spin-off,” Zhang said in a statement issued by Alibaba (NYSE:BABA).Alibaba announced in March that the company would be restructured into six business groups, looking to spin off and potentially list them in the coming year.Eddie Yongming Wu, chairman of the Taobao and Tmall Group will take over from Zhang as CEO, while Joseph Tsai, who is currently executive vice chair, will replace Zhang as chairman.3. Futures lower; Fed speakers prompt cautionU.S. futures traded lower Tuesday, as investors return to a holiday-shortened week and cautiously await more clues of the Federal Reserve’s future monetary policy.At 04:50 ET (08:50 GMT), the Dow futures contract had dropped 130 points or 0.4%, S&P 500 futures fell 19 points or 0.4%, and Nasdaq 100 futures dropped 85 points or 0.6%.The main equity averages posted strong gains last week after the Fed paused its prolonged rate-hiking cycle, with the broad-based S&P 500 and the tech-heavy Nasdaq Composite recording their best weekly performances since March, rising 2.6% and 3.3%, respectively.However, investors appear to be reluctant to chase these gains higher, with the likes of Federal Reserve St. Louis President James Bullard, New York Fed President John Williams, and Fed Vice Chair for Supervision Michael Barr all set to speak later in the session.Additionally, Fed chair Jerome Powell starts his two-day congressional testimony on Wednesday.These officials could potentially hint at a July hike given the Fed signaled the possibility of more rate increases later in the year if inflation remained an issue.In corporate news, shipping giant FedEx (NYSE:FDX) reports its quarterly results after the closing bell.4. Tide turning for aircraft manufacturersHard hit during the pandemic, aircraft manufacturers are starting to show signs of having turned the corner, with demand seemingly on the rise.Airbus (EPA:AIR) secured a historic deal on Monday, announcing an order for 500 narrowbody jets from Indian budget carrier IndiGo – the most jets ever bought by a single airline.The deal beats Air India’s combined purchase of 470 jets earlier this year as India’s two largest carriers plan for a sharp expansion in regional travel demand.This follows rival Boeing (NYSE:BA) stating over the weekend that it expects to increase production of its best-selling 737 MAX to 38 jets a month “pretty soon,” as the U.S. company looks to take advantage of demand ramping up.That said, there are still likely to be problems ahead, with the head of Boeing Commercial Airplanes, Stan Deal, noting that the company is still likely to see supply chain instability, while Airbus CEO Guillaume Faury said that supply disruption remained a short-term issue.5. Oil mixed; demand concerns remain despite China cutCrude prices traded in a mixed fashion Tuesday, as U.S. traders returned from the long weekend to digest the Chinese rate cut.By 04:50 ET, U.S. crude futures were 0.2% lower at $71.78 a barrel than Friday’s close, while the Brent contract rose 0.6% to $76.58 per barrel. There was no settlement in the WTI contract on Monday due to a public holiday in the United States.Growing concerns over an economic recovery in China, the world’s largest crude importer, have weighed on oil prices of late, and the latest cut in the country’s benchmark loan prime rate [see above] only had a limited impact given it was largely anticipated by markets.Traders are also nervous ahead of Fed chair Jerome Powell’s two-day congressional testimony, starting Wednesday, given the central bank hinted at more interest rate hikes ahead even as it paused its year-long tightening cycle last week.The prospect of rising U.S. rates and the associated impact on economic activity in the world’s largest energy consumer have weighed heavily on crude this year.U.S. crude inventories jumped almost 8 million barrels last week, way above forecast, while fuel stocks exceeded expectations as well, raising questions about energy demand during the peak summer travel period. More

The global bank now forecasts China’s gross domestic product (GDP) to grow at 5.3% in 2023, from 6.3% expected earlier.Last week, brokerages including J.P. Morgan and BofA Global Research lowered the country’s growth outlook after the country’s May industrial output and retail sales growth missed forecasts. More

(Reuters) – Asian bonds attracted their highest monthly foreign inflows in about two years in May, boosted by hopes of less aggressive monetary tightening measures from the U.S. Federal Reserve. Foreigners purchased a net $10.1 billion worth of bonds in India, Indonesia, Malaysia, South Korea and Thailand, marking their biggest monthly purchases since June 2021, data from regulatory authorities and bond market association showed. “Asia ex-China (bonds) could benefit as the Fed approaches the end of its tightening cycle, notwithstanding residual uncertainty on the terminal rate,” said Fiona Lim, senior fx strategist at Maybank. “This is especially in light of an arguably resilient macro backdrop where services sectors continue to hold up in most countries.”While the Federal Reserve maintained interest rates without change, deviating from 10 consecutive rate hikes, it indicated the likelihood of two small rate hikes by year-end to address inflation concerns. Analysts also noted that investors were encouraged by signs that regional economies had reached their peak inflation levels, leading to anticipated interest rate cuts by central banks to stimulate economic growth.South Korean bonds attracted net purchases of $8.2 billion, the highest since June 2021. Khoon Goh, head of Asia Research at ANZ, said the Bank of Korea is perceived to be mulling potential rate cuts towards the end of the year, boosting the appeal for their bonds. Malaysia and Indonesian bonds drew foreign inflow worth $652 million and $500 million, respectively, while India and Thai bonds got about $400 million each in the last month. Maybank’s Lim said the disappointment over China’s weaker-than-expected data in May, alongside U.S.-China tensions, could also have spurred a re-allocation of bond flows out of China into other Asian countries. Although foreign demand for Chinese bonds slightly rebounded in May, the percentage of foreign holdings as part of total outstanding Chinese government bonds remained at 8.3%, the lowest since July 2019, according to a Barclays (LON:BARC) report. More