Aurelia Butler

Stubbornly high inflation also prompted Iceland to lift rates by one percentage point on Wednesday, and India delivered an unscheduled rate rise. Some, such as the Bank of England, worry their economies are headed for recession, but that ha not stopped them from signalling more hikes are coming.Here is a look at where policymakers stand on the path out of the pandemic-era stimulus, ranked in terms of hawkishness. 1) NORWAY Norway’s central bank, Norges Bank, kept rates on hold on Thursday after hiking them by a quarter point to 0.75% in March, when it announced plans to tighten policy more quickly than previously planned. It plans to hike again in June and raise rates to 2.50% by end-2023, with three more hikes than projected previously. 2) NEW ZEALANDThe Reserve Bank of New Zealand is one of the world’s most hawkish central banks.It raised its cash rate last month by 50 bps to 1.5%, the biggest rise in two decades and the fourth hike in this cycle. With inflation at 30-year highs, markets expect another 50 bps hike this month — the RBNZ forecasts rates will peak around 3.35% by end-2023. 3) CANADA The Bank of Canada kicked off its rate-rise cycle in March, and raised rates last month by 50 bps to 1%, its biggest single move in over two decades.It is also letting maturing bonds roll off its balance sheet. BoC Governor Tiff Macklem reckons rates are still far below neutral levels, estimated between 2%-3%. Markets expect rates to approach 3% by year-end, with another half-point rise seen on June 1. 4) BRITAINThe BoE hiked rates to 1% on Thursday, their highest since 2009, to tame inflation it now forecasts will top 10% this year.Policymakers also hardened their language on the need for more tightening in the coming months, so much so that two of the nine BoE rate setters called the guidance too strong given the risk of Britain falling into recession.Markets expect rates to reach 2%-2.25% by end-2022. 5) UNITED STATES The Federal Reserve on Wednesday raised its key rate by 50 bps, the biggest jump in 22 years, and markets were relieved that the Fed did not go with a 75 bps move. Still, the Fed said it was ready to deliver more half-point hikes and plans next month to start reducing its $9 trillion stash of assets accumulated during the coronavirus pandemic to help bring inflation under control.6) AUSTRALIA The Reserve Bank of Australia raised rates by 25 bps to 0.35% on Tuesday and flagged more ahead. Having insisted for months that rate hikes were way off, the RBA finally joined the rate-rise club.The policy sea-change came after data showing first-quarter consumer inflation spiking to 20-year peaks of 5.1%. Core inflation hit 3.7%, above the RBA target band for the first time since 2010.Futures pricing points to rates reaching 2.5% by end-2022 and 3.5% by mid-2023, which would be the most aggressive RBA tightening cycle in modern history.7) SWEDEN A late-comer to the inflation battle, Sweden’s Riksbank last week notched up rates by 25 bps to 0.25% to contain inflation running at its highest since 1991 at above 6%. The Riksbank’s policy rate is now positive for the first time since 2014. It had said as recently as February that rates were not expected to rise until 2024. Now it expects to hike two or three more times this year, with more next year to take rates above 1%. 8) EURO ZONE The dovish European Central Bank has become more hawkish given record-high inflation at 7.5%. ECB board member Isabel Schnabel said this week rates may need to rise as soon as July. A precursor to any rate hike must be the end of bond purchases, and this could come at the end of June, she added.Markets price 90 bps of tightening this year, meaning the key -0.50% depo rate could exit negative territory soon. 9) SWITZERLAND The Swiss National Bank remains firmly dovish even though Swiss inflation surged to 2.4% in March, well above the SNB’s price stability goal of 0%-2%.It has refused to signal higher rates, insisting that a strong franc helps guard against inflation. 10) JAPANThe Bank of Japan remains the holdout dove. Last week it strengthened its commitment to keep rates ultra-low by vowing to buy unlimited amounts of bonds to defend a bond yield target. That sent the yen to two-decade lows against the dollar.Japan’s core consumer prices rose at their fastest pace in more than two years in March, but a fragile economy means the BOJ is no rush to tighten policy.($1 = 0.9329 Swiss francs) More

Nonfarm productivity, which measures hourly output per worker, plunged at a 7.5% annualized rate last quarter, the deepest since the third quarter of 1947, the Labor Department said on Thursday. Data for the fourth quarter was revised slightly lower to show productivity growing at a 6.3% rate instead of the previously reported 6.6% pace. Economists polled by Reuters had expected productivity would drop at a 5.4% pace. The decline was flagged in last week’s first-quarter gross domestic product report, which showed the economy contracting at a 1.4% rate in the January-March period.Productivity fell at a 0.6% pace from a year ago. It has been volatile since the start of the COVID-19 pandemic more than two years ago. Hours worked increased at a 5.5% rate in the first quarter after rising at a 2.5% pace in the fourth quarter. Unit labor costs – the price of labor per single unit of output – shot up at an 11.6% rate. That followed a 1.0% growth pace in the October-December quarter. Last quarter’s jump likely exaggerates the pace of growth in labor costs. Unit labor costs increased at a 7.2% rate from a year ago. The surge in costs followed on the heels of a government report last week showing that compensation for American workers notched its largest increase in more than three decades in the first quarter amid a persistent labor shortage. There were a record 11.5 million job openings at the end of March. The Federal Reserve on Wednesday raised its policy interest rate by half a percentage point, the biggest hike in 22 years, and said the U.S. central bank would begin trimming its bond holdings next month as it battles sky-high inflation. Fed Chair Jerome Powell told reporters that “the labor market is extremely tight, and inflation is much too high.”Hourly compensation rose at a 3.2% rate in the first quarter after growing at a 7.4% pace in the fourth quarter. Compensation increased at a 6.5% rate compared to the first quarter of 2021. More

China’s economy has slowed sharply in the second quarter this year, as local authorities raced to stop the spread of record COVID-19 cases, which have led to a full or partial lockdown in dozens of Chinese cities, including a city-wide shutdown in the commercial hub of Shanghai in April. The official jobless rate hit 5.8% in March, a near two-year high.While acknowledging firms are facing more difficulties, the government will follow through on its planned tax cuts and ensure VAT credit rebates will be returned to qualified companies by the end of June, according to a State Council meeting chaired by Premier Li Keqiang. More financial help would also be provided, as policymakers urge financial institutions to extend loan repayment and exempt default interest rates for small firms, the meeting said. To help the foreign trade sector, which is a key source of jobs, the government will focus on securing foreign orders, keeping the yuan basically stable and providing more loans for trade firms, the meeting said. More

MILAN (Reuters) -Italian luxury group Moncler said on Thursday it would open, refurbish or relocate 200 stores in the next three years, mostly in Asia, and diversify into shoes and clothes for warmer weather.The group, which in 2020 acquired streetwear brand Stone Island, also said it expected to beat analyst forecasts for annual sales of 2.43 billion euros ($2.57 billion) this year – up 18.5% from last year – provided a new round of lockdowns in some Chinese cities ended by July.”We think we can do 20%-25% (sales) growth,” Chief Corporate and Supply Officer Luciano Santel told reporters on the sidelines of an investor presentation. Spring-summer collections will account for up to one third of revenues in 2025, and footwear – including sneakers – will reach 10% of sales, Moncler, known for its puffer jackets, said in slides ahead of the event.Currently about 75% of revenues come from outerwear, according to Barclays (LON:BARC) analysts, who cited knitwear as another diversification option for the brand. By 2025, Moncler expects more than 50% of growth to come from China and the United States, the group said.The store expansion plan – which covers both the Moncler brand and the Stone Island label – sees up to 38 openings in Asia, including Japan and South Korea, 22 in Europe and the Middle East, and nine in the Americas in the next three years. The Moncler brand also aims to raise online sales to 25% of total revenues by 2025, up from 15% in 2021.Moncler, which on Wednesday reported a 60% jump in first-quarter sales, has like most rivals seen revenues rebound in Europe and the United States as COVID-19 restrictions eased. But it faces a setback in the Chinese market, the biggest for sales of high-end wares, where a strict lockdown has been imposed in the luxury hub of Shanghai and other cities since March. On Wednesday it said around 30% of its main brand’s stores in China were closed because of the restrictions, up from 10% in March. Just over a third of Moncler’s retail sales came from China last year but the brand is less exposed than rivals to the possibility of a prolonged shutdown as the second quarter is seasonally less important for its annual earnings, analysts say.In its presentation, the group said its planned openings in China included a flagship store in Beijing, adding it would create a China business unit at its Milan headquarters.($1 = 0.9467 euros) More