Aurelia Butler

The local IMACEC index, a close proxy of gross domestic product (GDP), rose 0.4% in January from the same month last year, the central bank said on Wednesday, while economists polled by Reuters had expected a 0.5% fall.Chile’s overall economy has been facing a slowdown after a rapid post-pandemic recovery, with high interest rates in place to combat soaring consumer prices affecting economic growth.The positive January result alone is unlikely to bring major changes to that scenario, with government forecasts released earlier this month pointing to a 0.7% economic contraction in 2023, but showed some economic resilience in the Andean country.”This is a very good start to the year…but leading activity indicators, hard data and the extremely low level of consumer confidence suggest growth momentum will remain subpar in the near term,” said Andres Abadia, chief economist for Latin America at Pantheon Macroeconomics.He expects activity to gather speed from late second quarter onwards, driven by falling inflation and interest rates.Traders polled by the central bank see the central bank kicking off a monetary easing cycle in May, when policymakers are expected to cut the benchmark interest rate to 11% from the current 11.25%. Rates would then fall to 6.5% within 12 months, the poll showed.In January, when compared with the previous month, the IMACEC index rose 0.5%, the central bank said.The year-on-year results was explained by services and mining, which were partly offset by a drop in trade, while the monthly increase was driven by basically all groups surveyed, it added. The IMACEC accounts for nearly 90% of the South American country’s GDP. More

UK house prices registered the largest decline in more than a decade last month as higher interest rates and the wider cost of living crisis hit demand, according to a closely watched survey.Property prices fell 1.1 per cent in February compared with the same month last year, the biggest drop since November 2012, and a reverse of a 1.1 per cent increase in January, mortgage provider Nationwide said on Wednesday. Economists polled by Reuters had expected a fall of 0.9 per cent.It was the first annual contraction since June 2020 when the housing market was effectively shut during the Covid-19 lockdown. Robert Gardner, Nationwide’s chief economist, said the drop in prices reflected low buyer confidence “as well as the cumulative impact of the financial pressures that have been weighing on households for some time”.The weak state of the housing market was underlined by separate Bank of England data that showed mortgage approvals for house purchases fell to 39,600 in January, down from 40,500 the previous month and the lowest since May 2020. Excluding the onset of the Covid-19 pandemic, this was the lowest level of approvals since January 2009, when Britain was mired in recession following the banking crisis.Separately, Persimmon, one of the UK’s largest housebuilders, warned on Wednesday that sales of new homes could fall as much as 40 per cent this year if high mortgage rates and economic uncertainty continued to depress buyer demand.The average interest rate on new mortgages rose to 3.9 per cent in January, the highest since 2010, BoE data showed, with the markets still anticipating further rises in interest rates as the central bank seeks to rein in inflation.The average house price fell to £257,406 in February, down from a peak of £273,751 in August, but still £41,000 above level of January 2020, before the pandemic hit.House prices were down 0.5 per cent on January, the sixth consecutive monthly decline since the August peak, marking the longest period of contraction since 2009.Adjusted for inflation, house prices have fallen 11 per cent from their peak and are below their pre-pandemic level, which compares with a fall in real terms of 19 per cent between 2007 and 2009, according to Andrew Wishart, senior property economist at Capital Economics.Luke Thompson, mortgage adviser at PAB Wealth Management, said: “[Sellers] have had to become more accustomed to the fact that they may not achieve the full asking price for their property as we aren’t seeing multiple people bidding for a property like we were at the end of 2021 and into 2022.”Many economists think the slowdown in the property market will continue for some months. “It will be hard for the market to regain much momentum in the near term since economic headwinds look set to remain relatively strong,” Gardner said.Gabriella Dickens, senior UK economist at Pantheon Macroeconomics, said house prices would “continue to decline over the next six months or so, resulting in a peak-to-trough fall of about 8 per cent”. However, she expected house prices to return to expansion in 2024 if the BoE started reducing interest rates and energy price pressures eased. Nationwide tracks house prices based on the mortgage it issues, providing the most timely measure of property values. More

Investing.com — China’s economy grew at the fastest rate in eight months in February, gaining momentum after the end of COVID-19-related lockdowns, according to new business surveys. Tesla is expected to confirm plans for a $5 billion plant in Mexico. Arconic surges after reports of talks with private equity giant Apollo and maybe others over a possible buyout. The pound weakens and the euro rises after contrasting messages from top central bankers, and oil comes off a one-week high after fresh signs of weaker demand in the U.S. Here’s what you need to know in financial markets on Wednesday, 1st March.1. Chinese assets, metals rise as China PMIs show reopening bounce; ISM PMI dueThe yuan rallied by 1% after key business surveys showed the Chinese economy expanded at its fastest pace in eight months in February.Both the official and the Caixin manufacturing purchasing managers indices rose markedly from January to be well above the 50 level that typically indicates growth. The official manufacturing PMI, which largely tracks the bigger, state-owned enterprises, hit its highest level in more than a decade.The news gave a boost to industrial metals prices, which rose by between 1-2%.The numbers came on the same day that the U.S. Institute for Supply Management publishes its manufacturing PMI for February, which is expected to show U.S. activity contracting, albeit by less than in January.2. Tesla set to outline plans for first Mexican plantTesla (NASDAQ:TSLA) is set to unveil plans for its first factory in Mexico as part of a big Investor Day presentation.Mexico’s leftist President Andrés Manuel López Obrador indicated at a news conference on Tuesday that the two sides had settled differences over the company’s plans for a plant at Monterrey in northern Mexico, which centered around Tesla’s intensive use of water in a region that doesn’t have much of the stuff.Analysts expect the investment volume to be around $5B. The burden for Tesla will (yet again) be reduced by U.S. federal government subsidies, this time under the Inflation Reduction Act, whose provisions extend to the U.S.’s southern neighbor.Elsewhere in the auto industry, Rivian (NASDAQ:RIVN) stock fell over 9% in premarket after the EV maker reported another big loss and fell short of expectations for its fourth quarter sales. General Motors (NYSE:GM), meanwhile, is reportedly set to cut another 500 executive jobs as part of its ongoing cost-cutting.3. Stocks set to open higher; Arconic surges on buyout talkU.S. stock markets are set to open modestly higher after edging lower on Tuesday in response to another set of generally weak U.S. economic data.By 06:30 ET, Dow Jones futures were up 68 points or 0.2%, while S&P 500 futures were up 0.3% and Nasdaq 100 futures were up 0.6%.Tesla aside, stocks likely to be in focus later include Monster Beverage (NASDAQ:MNST), whose earnings fell short of expectations late on Tuesday, and Arconic (NYSE:ARNC), which rose sharply on Tuesday after The Wall Street Journal reported is in talks to sell itself to Apollo Global Management (NYSE:APO). The news adds to signs of a thawing of the M&A market, which was frozen late last year as banks struggled to offload large amounts of unsold buyout debt.4. Pound sags, euro firm as Bailey and Nagel send mixed messages on further rate hikesThe pound fell after Bank of England Governor Andrew Bailey appeared to play down expectations of more aggressive interest rate increases later this year. As with the euro and dollar, some better-than-expected economic data at the start of the year – including strong consumer credit data for January published earlier Wednesday – have prompted a repricing of interest rate expectations for the sterling.However, Bailey said in a speech that “nothing is decided” despite acknowledging ongoing issues with labor market tightness – and despite figures released on Tuesday that showed food prices rose over 17% on the year in January.In Germany, Bundesbank chief Joachim Nagel was decidedly less nuanced, saying it would be a serious mistake to stop the European Central Bank’s rate hike cycle too early. Preliminary data showed German inflation again coming in above expectations in February, while unemployment rose by less than forecast.5. Oil dips on another big rise in U.S. inventoriesCrude oil prices were broadly lower, with another big build in U.S. inventories prevailing over the supportive effect of the Chinese PMI data.American Petroleum Institute data late on Tuesday showed another 6.2 million rise in U.S. crude stocks last week, well above expectations and skewing the market toward an upside surprise when the government publishes its data at 10:30 ET.Analysts noted that the Chinese reopening story has been broadly priced in, by contrast.By 06:45 ET, U.S. crude futures were down 0.9% at $76.33 a barrel, while Brent crude was down 0.6% at $82.91 a barrel. More

“I believe that going forward we could consider slowing the pace of rate adjustments, as it is already very close to the appropriate level to consolidate a de-inflationary process,” he said in a podcast interview with Grupo Financiero Banorte.”We predict that Mexican economic activity will continue to grow,” he added, despite restrictive monetary policy and a global slowdown which he said appears less pronounced than first forecast. Mexico’s president has highlighted the importance of finding an equilibrium between combating inflation and allowing economic growth.Mejia said though easing inflation was taking longer than predicted, he still expects it to meet the central bank’s target in the fourth quarter of 2024, adding that the persistently high core component remains the country’s main inflationary challenge.Annual headline inflation in the first half of February stood at 7.76%, while the core index, which strips out some volatile food and energy prices, reached 8.38% – well past the central bank’s target of 3%, plus or minus one percentage point.Mejia’s stance is in line with most of the central bank’s board members, who according to recent minutes from a meeting, are considering a more moderate rate hike at the next monetary policy meeting scheduled for March 30.Mejia was confirmed as the central bank’s newest board member last month, when he pledged transparency and independence and said tackling inflation would be a priority in his role.”I came to the bank at a time when the global economic environment presents many challenges, particularly the inflationary outlook,” he told Banorte. “However, I believe that central banks have the right tools at their disposal.” More

(Reuters) – TikTok said on Wednesday it is developing a tool that will allow parents to prevent their teens from viewing content containing certain words or hashtags on the short-form video app, as the embattled company looks to shore up its public image.TikTok, owned by Chinese tech company ByteDance, is facing renewed scrutiny worldwide over its proximity to the Chinese government and protection of user data. The app, wildly popular among younger users, has been banned from government-owned phones in the United States, Canada and other countries due to security concerns.Like other social media apps, TikTok has also faced criticism for not doing enough to shield teens from inappropriate content. Development of the parental control feature is in the early stages and the app will consult with parenting, youth and civil society organizations to design the tool, TikTok said in a blog post. It also announced new features to help users limit the amount of time they spend on the app. Accounts belonging to users under 18 will automatically have a time limit of one hour per day, TikTok said. If teens choose to remove the daily limit and scroll TikTok for more than 100 minutes per day, the app will display a prompt encouraging them to set time limits.Parents will now also be able to set custom time limits for their teens’ TikTok usage depending on the day of the week, the company said. More

LONDON (Reuters) -An influential group of British lawmakers have questioned whether banks are making excessive profits without passing the benefit of Bank of England interest rate rises to savers, in a series of letters to bank bosses sent on Wednesday.The Treasury Committee noted profit margins at the four biggest British banks – Lloyds Banking Group (LON:LLOY), NatWest, HSBC and Barclays (LON:BARC) – increased in 2022 earnings published last month, while some also bumped up boardroom pay. “While consumers are always advised to shop around for the best deals, it is difficult to avoid the conclusion that our biggest banks are taking advantage of their most loyal customers to increase profits and CEO pay,” said Harriett Baldwin, chair of the committee.The committee has asked the four banks to justify why they offer less than 1% interest on easy access savings accounts, despite the Bank of England benchmark rate rising to 4%.Top executives from the lenders were already hauled before the committee last month to answer criticism they were too slow to pass on the benefits of central bank rate hikes to savers.The executives said at the time they had started to pass on higher rates, including on fixed-term products, and that profitability was recovering after years of low margins.Lenders are also facing calls from campaigners for a windfall tax on their profits, as in the energy sector, at a time when millions of their customers are struggling with a cost-of-living crisis.Banks reported robust profits for 2022 in earnings last month, but warned margins could already have peaked as competition steps up. Analysts have questioned whether political pressure could have been a factor in banks outlining cautious guidance on their future earnings potential. More