Aurelia Butler

JERUSALEM (Reuters) -Israel’s annual consumer price index (CPI) rose 4.4% in June, the most since November 2008, the Central Bureau of Statistics said on Friday as another rise in interest rates beckons. A Reuters poll of analysts had projected 4.5%. CPI rose 0.4% in June from May, led by gains in transport, housing rentals and healthcare.The Bank of Israel is widely expected to raise interest rates again at its next meeting on Aug. 22 after three straight increases since April that have taken the benchmark rate to 1.25% from 0.1%. Last week it raised the rate by a half-point.”Inflation is accelerating broadly,” said Leader Capital Markets Chief Economist Jonathan Katz. “With the Bank of Israel rather influenced by other central banks who are front-loading, it is fair to expect a 0.5% hike on August 22 and 0.5% on October 3 with rates reaching 2.75% in early 2023.”While Israel’s inflation rate is around half that in the United States and Europe and its central bank says some price pressure stems from global supply issues and commodity prices, policymakers are concerned over a very low jobless rate of 3% that is pushing up wages.Meanwhile, consumer demand remains robust, contributing to expected economic growth of 5% this year.Economy Minister Orna Barbivai asked Israel’s top supermarket chains to delay for two weeks raising regulated bread prices that were set to jump 20% next week, according to a statement from the Prime Minister’s Office on Friday. The chains agreed, it said.Barbivai also spoke with representatives of major bakeries to find a solution to higher raw materials costs without harming consumers.Prime Minister Yair Lapid said he would enter into discussions with relevant authorities on Sunday.The shekel gained to 3.48 per dollar from a rate of 3.49 after the inflation report. More

A rout in the copper market deepened on Friday, with the price of the world’s most important industrial metal sliding below $7,000 a tonne for the first time since November 2020 as recession fears gripped markets.The benchmark copper contract on the London Metal Exchange slipped 1.6 per cent lower to $6,987, as slowdown concerns intensified after weak economic data from China. The drop put copper on course for its worst weekly loss since the depths of the pandemic in March 2020, down more than 10 per cent.Copper is widely regarded as a gauge of economic activity because of its use in everything from household appliances to electric vehicles. It is also a popular way for hedge funds to bet on slowing global growth. Bearish wagers on copper are currently at their highest level since 2015, according to Marex, a commodities brokerage. “Concerns over declining western economies and the impact of a slow property market as well as repeated Covid-19 lockdowns in China have seen a market worried about lost Russian metal supply . . . change focus,” said Peel Hunt analyst Peter Mallin-Jones.Copper has dropped vertiginously since its price hit a record high above $10,600 a tonne in March, when the market was convulsed by concerns that Russia’s invasion of Ukraine could disrupt already tight supplies.Now, the market’s gaze has flipped to fears that aggressive rate hikes by central banks, rising Covid cases in China and the prospect of Russia cutting off European gas will hit demand for copper and other commodities. A stronger dollar has also weighed on copper by making it more expensive for holders of other currencies to buy.Earlier this week, Goldman Sachs, which has been one of the most bullish voices on commodities, cut its three-month copper price forecast to $6,700 a tonne, citing “increasingly pessimistic growth expectations”.“This latest leg lower has been tied to increasing headwinds to the European growth path, in particular from the impact of surging regional natural gas prices on activity,” the bank said.On Friday, Rio Tinto, one of the world’s biggest copper producers, warned of a darkening outlook for the global economy, citing the “increasing risk” that rapid rate rises dent US demand and the “considerable headwinds” facing China’s recovery from pandemic lockdowns.Data on Friday showed the Chinese economy expanded just 0.4 per cent year on year in the three months to the end of June, as Beijing’s zero-Covid strategy hit activity. China is the world’s largest consumer of commodities, accounting for half of global copper demand.Fears of a demand-sapping recession come as the copper industry braces for what analysts have called a “last hoorah” in mine supply as a number of projects that have been under development for a decade or more hit the market. Bank of America expects copper supply growth of 7.3 per cent year-on-year in 2023 to 26.8mn tonnes. To put that figure into perspective, growth has averaged just 2.4 per cent in the past 10 years.Copper bulls identify a silver lining to the current sell-off, suggesting that it will make miners reluctant to sanction new projects that will be needed later in the decade as the world shifts to cleaner forms of power.A study published by S&P Global this week concluded that demand for copper will double over the next decade, from 25mn tonnes today to 50mn by 2035, because of its uses in electric vehicles, charging infrastructure, solar panels, wind turbines and batteries.“Copper should be a big beneficiary of the accelerating decarbonisation agenda and current price volatility could further delay needed investment in new mines,” said Mallin-Jones. More

ROME (Reuters) – Italy might need early elections to overcome a political impasse, government officials said on Friday, after Prime Minister Mario Draghi tendered his resignation in the wake of a mutiny by a coalition partner.President Sergio Mattarella rejected Draghi’s resignation on Thursday and asked him to address parliament next week to get a clearer picture of the political situation.If unity cannot return swiftly to government ranks, the only alternative would be for an election to be called in the autumn, Foreign Minister Luigi Di Maio said, warning that an early vote would be welcomed by Russia, but would damage Italy’s economy.”If Draghi falls, we vote,” he told RTL radio, adding that without a fully functioning government in the coming months, Italy would risk losing billions of euros in European Union post-pandemic recovery funds and would not be able to enact measures to combat climbing energy costs.”The Draghi government and the coalition that supported it must continue, but right now I see it as very, very difficult.”Draghi’s 18-month-old government was thrown into turmoil by the populist 5-Star Movement, which boycotted a parliamentary confidence motion on Thursday on Draghi’s plans to tackle the growing cost of living, arguing they did not go far enough.Critics say the party, which was torn apart by a schism last month, was acting merely out of self interest, anxious to raise its profile with voters following a slump in the opinion polls.The risks of political chaos has unnerved financial markets with the premium Italy pays over German debt rising to a one-month high on Friday.Underscoring those concerns, European Central Bank policymaker Olli Rehn said Italy could be hit particularly hard by a European energy crisis in the wake of its political crisis, saying Draghi had brought “much-needed stability, perseverance and firmness to Italian decision-making.”Speaking in his native Finland, Rehn said: “It may be that we will see a very difficult period in Italy.”EUROPEAN CREDIBILITYA national election is due in the first half of 2023 and bringing the vote forward would give parties little time to draw up manifestos and prepare their lists of candidates.However, two sources in the prime minister’s office, who declined to be named, expressed pessimism over the future of the coalition, saying Draghi was determined to stand down. The most likely outcome was a vote in early October, they said.In that case Draghi could stay on in a caretaker capacity, but would not be able to draw up budget for 2023 or enact reforms demanded by Europe in return for the recovery funds.”Italy cannot do without Mario Draghi,” said Renato Brunetta, the public administration minister and a member of the centre-right Forza Italia party. “We cannot lose the credibility and trust we have gained in Europe and the world in such difficult times,” he wrote on Twitter (NYSE:TWTR).Draghi, a widely respected former ECB president, has played a prominent role in the EU’s response to Russia’s invasion of Ukraine, helping draw up economic sanctions on Moscow and sending weapons to Kyiv.None of the parties in the national unity government have called for elections in the wake of Draghi’s resignation offer. However, the one major group that stayed outside the coalition, the far-right Brothers of Italy, embraced the idea at once.Led by Giorgia Meloni, the Brothers of Italy has seen its support soar during its time in opposition and looks likely to emerge as the largest single party in the next parliament.”With Draghi’s resignation … this legislature is over,” Meloni wrote on Twitter. “Elections immediately.”Italy has not had an autumn election since World War Two as that is normally the period when the budget is drawn up.The 5-Star is likely to come under heavy pressure from other coalition partners to back down in its confrontation with Draghi and allow his administration to see out the legislature, but there was no immediate sign of any shift in its position.”We now have 5 days to work so that parliament confirms its trust in the Draghi government and Italy emerges as quickly as possible from the dramatic crisis it is currently entering,” said Enrico Letta, head of the centre-left Democratic Party. More