Economy

The information minister said last Friday ten cabinet members had resigned in order to stand in ruling party primaries which decide who from the All Progressives Congress will run for the presidency, state governorship and senate. But junior petroleum minister Timipre Sylva and the ministers of justice, labour and women’s affairs, said on Tuesday they had decided to stay in their jobs to help the president deliver his policies.The country’s central bank governor Godwin Emefiele is seeking a court order to bar the electoral commission and nation’s attorney general from preventing him from running for president without resigning his post. The matter will be heard on May 23.Nigerians will hold a general election early next year to choose a new president, state governors and house of assembly members. With Buhari prevented from seeking re-election after serving the constitutionally mandated two four-year terms, more than 20 ruling party members have declared themselves candidates. More

The staff-level agreement is subject to approval from IMF management and the executive board, which is expected to meet in June. The review’s completion would allow the disbursement to cover external financing needs, the IMF said in a statement. The IMF in December approved a three-year loan deal for Niger worth around $276 million, meant to help it recover from the effects of the COVID-19 pandemic.”Program performance until end-March 2022 was broadly satisfactory and most quantitative macroeconomic objectives were met,” said the IMF on the agreement. Economic growth is projected to rebound to 6.9% in 2022 from 1.3% in 2021 on the back of agricultural production and large-scale investment projects relating to an oil pipeline to Benin, it said. However, inflation remains elevated due to food price pressures, the IMF said. Niger lies in the semi-arid Sahel region, where armed Islamist groups linked to al Qaeda and Islamic State have destabilised swathes of territory in recent years. They have carried out regular attacks that have killed thousands of people and displaced millions.Niger ranks last out of 189 countries in the United Nations’ Human Development Index, which measures health, education and quality of life. More

The Netherlands governor, one of the ECB’s most hawkish policy makers, told Dutch television that he supports a quarter-point increase in July already mooted by several of his colleagues, but then added that a larger magnitude shouldn’t be excluded if necessary.The euro extended its rally, trading 0.8% higher at $1.0517 on Knot’s comments. Money markets are pricing in 105 basis points of tightening by December, according to swaps linked to ECB decision dates.The comments open a new line of argument on monetary policy at a time when the ECB’s resolve toward stimulus withdrawal is galvanizing fast. While the US Federal Reserve just delivered a half-point move in April, euro-zone officials have been more cautious at a time when war is raging next-door to their currency area. “The first interest-rate hike is now being priced in for the monetary-policy meeting of July 21, and that seems realistic to me,” Knot said. “Based on current knowledge, my preference would be to raise our policy rate by a quarter of a percentage point. Unless new incoming data in the next few months suggests that inflation is broadening further or accumulating. If that’s the case, a bigger increase must not be excluded either.”Asked about the extent of such a move, Knot said that “in that case, a logical next step would amount to half a percentage point.”Inflation, which is running at 7.5% in the euro zone — almost four times the ECB’s target — is the driving force, despite the war in Ukraine weighing on the continent’s pandemic recovery and prompting to some officials to warn of stagflation.The risks facing the region were laid out starkly on Monday by the European Commission, which cut its growth forecast and raised its inflation outlook, adding that in a “severe” scenario of a total Russian gas supply shutoff, the economy would barely expand.Knot said that while he doesn’t currently envisage a global recession, people will still face higher inflation in the next few months, and normalizing monetary policy is “the only option.”The momentum building among toward a rate hike has already gone beyond the first move in July, with policy makers increasingly embracing a scenario of taking interest rates above zero before the end of the year, according to officials familiar with the matter.©2022 Bloomberg L.P. More

Investing.com — U.S. retail sales data for April, and their significance for Federal Reserve policy, are set to dominate at least the early part of the day. Earnings and guidance from Walmart and Home Depot will also shed light on the strength, or otherwise, of the U.S. consumer. Elon Musk obfuscates in an attempt to drive down the price of his Twitter acquisition, causing Twitter stock to drop further and Tesla stock to bounce. The defenders of the Azovstal steelworks in Ukraine lay down their arms, ending the longest battle of Russia’s war in Ukraine, and oil prices hit a seven-week high as confidence in Shanghai’s reopening rises. Here’s what you need to know in financial markets on Tuesday, 17th May.1. Retail sales to sway Fed?Is the U.S. consumer still spending, or has inflation and talk of an economic slowdown ahead already killed the desire to get out and have fun in a world without lockdowns? We shall all be a little bit the wiser at 8:30 AM ET (1230 GMT), when the U.S. releases retail sales numbers for April.Sales are expected to have risen 0.9%, which would be their strongest increase in three months, while core sales are expected to have grown only 0.4%, which would be their weakest increase in four months.With forecasts like that, any number of interpretations should be possible. Fortunately, there will be a handful of speakers from the Federal Reserve in the course of the day to let us know if the numbers have changed anything (there’s a hint of hope in the air that a bad number will persuade the Fed to ease up on the policy tightening front).Fed chair Jerome Powell headlines at 2 PM ET, while James Bullard and Patrick Harker will be the warmup acts and Loretta Mester and Charles Evans will be your hosts for the after-party.2. ObmuskationElon Musk said his deal for Twitter (NYSE:TWTR) can only proceed if the social media company can prove its estimates about fake and spam users. Twitter CEO Parag Agrawal had posted a long thread on Monday explaining why this is, for all practical purposes, impossible.Musk claimed, via the microblogging site (not via an SEC filing, of course), “20% fake/spam accounts” as a baseline – some four times what Twitter says. He added for good measure that the figure “could be *much* higher.”“My offer was based on Twitter’s SEC filings being accurate. Yesterday, Twitter’s CEO publicly refused to show proof of 5%. This deal cannot move forward until he does.”The news strengthened suspicions that Musk may be looking for an excuse to walk away from the deal, preferably without triggering the $1 billion break fee he agreed to. Twitter stock was down 2.6% in premarket, while Tesla (NASDAQ:TSLA) stock, which hit a nine-month low on Monday, bounced 3.7%.3. Stocks set to open higher on Shanghai reopening hopes; Walmart, Home Depot eyedU.S. stocks are set to open higher, as global growth concerns ease in response to news that Shanghai has moved a step closer to lifting a two-month-long lockdown.By 6:15 AM ET, Dow Jones futures were up 488 points, or 1.5%, while S&P 500 futures were up 1.8% and Nasdaq 100 futures were up 2.1%. The Nasdaq contract has gained for three of the last four days since touching an 18-month low last week.The retail sales data will be cross-checkable at the corporate level against Walmart (NYSE:WMT) and Home Depot (NYSE:HD) earnings, which are due early. Imperial Brands (LON:IMB), the owner of West and Winston cigarettes, rose 7.5% to a two-year high after putting its own earnings out in London earlier. Numbers are also due from Canada Goose (NYSE:GOOS), Sea Ltd (NYSE:SE), AerCap (NYSE:AER), and JD.com (NASDAQ:JD)4. Ukraine aid bill progresses as Mariupol defenders surrenderUkrainian soldiers defending the Azovstal steelwork in Mariupol laid down their weapons, allowing Russia to complete the conquest of the port city on the Black Sea. That comes a day after Russian troops successfully repulsed a Ukrainian counter-attack in the same region.Elsewhere, Turkish President Recep Tayyip Erdogan said he would oppose NATO membership for Sweden and Finland, due to their harboring his political opponents. Newswires cited defense officials as expecting the objections to be smoothed over.The $40 billion U.S. aid package for Ukraine advanced in the Senate on Monday, passing a procedural bill 81-11, despite opposition from some Republican Senators. Treasury Secretary Janet Yellen echoed some of their sentiments on Tuesday by calling for Europe to increase its aid to Ukraine.5. Oil hits 7-week high on Shanghai hopes, OPEC+ shortfallCrude oil prices hit a seven-week high as Shanghai completed a third straight day without detecting any new cases of COVID-19 in its quarantine area, bolstering confidence that it can lift its lockdown in June as signaled by local officials.By 6:30 AM ET (1030 GMT), U.S. crude futures were up 0.6% at $112.54 a barrel, while Brent crude was up 0.7% at $115.00 a barrel.  Prices were also supported by newswire reports suggesting that OPEC and its allies had pumped 2.6 million barrels a day less than planned in April, as sanctions on the Russian oil industry compounded problems with underinvestment in other members of the bloc. The American Petroleum Industry will report its weekly inventory numbers at 4:30 PM ET, as usual. More

German Finance Minister Christian Lindner told four European newspapers that he was open to the idea of seizing Russian state assets to finance the reconstruction of Ukraine and that proposals to that effect were already being discussed among the G7 and in the EU.Kremlin spokesman Dmitry Peskov told reporters that no one had informed Russia of such an initiative, which he said would be “illegal, blatant and of course requiring an appropriate response… It would be, in fact, outright theft.”The Group of Seven major Western powers banned transactions with Russia’s central bank and froze its assets held in their jurisdictions, worth around $300 billion, after Russia launched what it called its special military operation in Ukraine in February. More

BANGKOK (Reuters) – Thailand’s finance minister said on Tuesday this year’s economic outlook was still good despite the state planning agency’s downgrade of its growth forecast, adding he also hoped for a policy rate from the central bank that supports recovery.A weak baht was good for exports though it made imports more costly, Finance Minister Arkhom Termpittayapaisith told reporters. The currency has recently been trading at its weakest level in almost five years against the dollar.Earlier on Tuesday, the planning agency cut its 2022 growth outlook to 2.5%-3.5% from 3.5%-4.5% and raised its inflation estimate because of higher prices and slower global growth caused by Russia’s invasion of Ukraine.Arkhon said the revised outlook “is still considered a good sign that the economy is still recovering”.Monetary policy should continue to support Southeast Asia’s second-largest economy as fund outflows have been small following the U.S. Federal Reserve’s policy tightening, he said.”I still want to see an interest rate that is positive for the economic recovery, though we also have to weigh fund outflows, which haven’t been much yet,” Arkhom said.The Bank of Thailand (BOT) has left its key rate unchanged at a record low of 0.50% since May, 2020. It will next review its policy on June 8.With inflation already breaching the top end of the BOT’s target range of 1%-3%, some economists predict a rate hike later this year, rather than next year.In a bid to mitigate the impact of high fuel prices, the government agreed on Tuesday to cut the excise tax on diesel by 5 baht ($0.1447) per litre for two months, resulting in a revenue loss of about 20 billion baht ($578.7 million).But the tax reduction would not affect the country’s overall fiscal position due to improved tax collection, Arkhom said.”After that, we will have to see global oil prices again whether there is a need for additional measures,” he said.($1 = 34.5600 baht) More

UK unemployment fell to its lowest level in nearly half a century in the first quarter of 2022, with almost a million people switching jobs as the number of vacancies rose to a new high of 1.3mn.Data released on Tuesday underscored the scale of the challenge facing the Bank of England as it tries to rein in soaring inflation, while workers seek wage rises to ease the squeeze on the value of their earnings. “Even though the economy contracted in March and may be on the brink of a recession, jobs growth strengthened . . . and wage growth accelerated,” said Paul Dales, at the consultancy Capital Economics. He argued that the Bank of England would need to raise interest rates further than expected to quell inflationary pressures. The Office for National Statistics said the jobless rate stood at 3.7 per cent in the three months to March, the lowest level since 1974, with fewer people out of work than there were job openings for the first time on record. The number of people unemployed for between six and 12 months also fell to its lowest level on record, the ONS said.However, the UK’s workforce remains smaller than it was before the pandemic, because of the large numbers who say they are neither working nor job-seeking. The employment rate rose to 75.7 per cent, 0.1 percentage points up on the quarter but still 0.9 percentage points lower than in early 2020, with a further rise in the rate of economic inactivity adding to the strains on a tight labour market. Data due on Wednesday are expected to show that inflation climbed above 9 per cent in April, driven by the increase in regulated energy prices. Andrew Bailey, the Bank of England governor, said on Monday that the central bank could do nothing to prevent inflation rising into double digits by the autumn — while admitting that it had been slow to recognise the pressures building in a “very tight” labour market. People on high earnings should “think and reflect” before asking for big pay rises this year, Bailey added, because of the risk that rapid wage growth would feed further increases in consumer prices, keeping inflation high for longer.The ONS said annual growth in regular weekly earnings rose to 4.2 per cent in the three months to March, equivalent to a real terms fall of 1.2 per cent, a figure that was flattered by comparison with a period in which many employees were furloughed during lockdown. However, total pay including bonuses was still outpacing inflation, with annual growth of 7 per cent, or 1.4 per cent in real terms. This overall growth masked big differences between sectors, though, with nominal total pay up 10.7 per cent year on year in finance and business services, but just 1.4 per cent — equivalent to a big real terms fall — in the public sector. Hannah Slaughter, economist at the Resolution Foundation, said some people were taking advantage of a tight jobs market to move roles or secure retention bonuses, but that “for the vast majority of the workforce, the labour market may feel far less hot”.Analysts said the data would strengthen the case for the Bank of England’s Monetary Policy Committee to raise its benchmark interest rate again next month, but that the red-hot labour market could soon start to cool as the squeeze on household incomes deepened. Samuel Tombs, at the consultancy Pantheon Macroeconomics, said there was “no need for the MPC to panic about wage growth”, arguing that people were likely to rejoin the workforce or work longer hours to combat financial pressures, while an unusually big cohort of students was about to graduate and immigration was picking up. Yael Selfin, chief economist at KPMG, said that while bonuses were high in some sectors, the figures suggested “that inflation is not yet embedded in wage-bargaining expectations”.Chancellor Rishi Sunak said it was “reassuring that fewer people are out of work than was previously feared”, adding that tax cuts and other government support were “helping them keep more of their hard-earned money”. More

BRUSSELS (Reuters) – U.S. Treasury Secretary Janet Yellen called for U.S. allies to step up financial support for Ukraine on Tuesday, saying that funds announced so far would not be sufficient for the country’s short-term needs as it battles a Russian invasion.”Ukraine’s financing needs are significant,” Yellen said in remarks prepared for delivery to the Brussels Economic Forum, adding that the country’s government continued to function, due to the ingenuity and bravery of its officials.”In the months until tax collection can resume at pace, Ukraine needs budget funding to pay soldiers, employees and pensioners, as well as to operate an economy that meets its citizens’ basic needs,” Yellen said. “In short order, it will need to turn to repairing and restoring critical utilities and services.”While Ukraine would eventually need “massive support” for reconstruction and recovery on the scale of the post-World War Two Marshall Plan for Europe, the country would have to take this “one step at a time.””What is clear is that the bilateral and multilateral support announced so far will not be sufficient to meet Ukraine’s basic needs,” Yellen said.With the war shuttering as much as half of Ukraine’s economy, the country requires near-term external financing of about $5 billion per month to meet basic needs, according to Ukrainian President Volodymyr Zelenskiy and the International Monetary Fund..The European Union on Wednesday is set to propose a new package of loans to Ukraine to provide immediate liquidity, along with commitments for longer-term reconstruction. While the short-term package is still being defined, two officials familiar with the discussions told Reuters they expected it to roughly cover Ukraine’s financial needs for two months.Yellen called on allies to “join us in increasing their financial support to Ukraine” as the U.S. Senate moved closer to passing a $40 billion spending package of military and humanitarian aid for the war-torn country..TAX WORK NEEDEDYellen also said more work was needed to bring a global deal to reform corporate taxes over the finish line. That would include resolving disagreements over the design of the “Pillar 1” plan to reallocate some taxing rights on large, highly profitable multinationals to “market countries” where their services and products are sold.The treasury secretary on Monday achieved no breakthroughs in persuading Polish officials to adopt the EU implementation plan for the “Pillar 2″ 15% global minimum corporate tax, but pledged to keep working on the issue.”And on Pillar 2, the EU and the United States must show leadership by expeditiously implementing the global minimum tax in our domestic laws,” Yellen said.She also said the United States was committed to helping to meet European energy needs as Europe tried to break its dependence on Russian oil and gas.She called on Europe, the United States and other allies to also band together to reduce their dependence on China for critical materials such as rare-earth metals and to diversify supply chains.Yellen said that with Russian energy less available due to embargoes or supply cuts, there would likely be a near-term uptick in usage of coal and other fossil fuels. “And if this blunts some of our immediate climate goals for a short period, let it also prod us to redouble our efforts on clean and renewable energy.” More