Economy

Not many people would list “unafraid of spiders” on their CV. Yet, in Sydney, home of the world’s most venomous spider to humans, not being perturbed when asked to expel an unwanted arachnid is a skill that can be monetised. Airtasker — an Australian online marketplace that connects people who need jobs done with cleaners, carpenters, gardeners and more — has found there is also a market for spider removalists, as opposed to full time fumigators. A woman posted that she would pay A$35 to anyone that could immediately evict a large spider from her home. Within hours her post had been copied multiple times, and a niche industry was born. For Tim Fung, founder and chief executive of Airtasker, the rise of the spider catchers is evidence of the sort of services that people did not realise they needed. “Certain skills are recognised but others aren’t,” he says. “But not being scared of spiders is a skill. Every single person has unique things that they can do.” Tim Fung: ‘Every single person has unique things that they can do’Specialist tasks — such as Ikea furniture assembly, Lego tuition and bathroom tap replacement — may seem niche but, in aggregate, have become lucrative sidelines for the “taskers”, and big business for the marketplace.Fung gives the example of one tasker, known as the “Trampoline Whisperer”, who earns tens of thousands of dollars a year installing trampolines for parents wanting to surprise their kids, who are unwilling or unable to do it themselves.The idea for Airtasker came in 2012, when Fung asked a friend to help him move house. That friend had a truck, normally used to transport frozen chicken nuggets. As he moved his chicken-scented possessions into his new home, Fung asked himself why he was roping in a reluctant friend to help — and why an eBay-like marketplace for odd jobs didn’t exist.Ten years on, and Airtasker has 150,000 taskers that have served 1.2mn paying customers, taking it to 292nd place in the FT ranking of high-growth Asia-Pacific companies.The value of the jobs booked through the ecommerce company since its inception is now A$1.1bn. From 2008 onwards, it has expanded into the UK, New Zealand, Singapore and the US, taking it into competition with near-rivals, such as US platforms TaskRabbit and Thumbtack.Strict lockdown measures in Australia during the pandemic hampered Airtasker’s progress as, in many places, its taskers were not allowed to enter people’s homes to do odd jobs. That hit its shares, which have halved in value since October.But the company has started to recover since those measures were lifted. Airtasker’s revenue rose 10 per cent to A$13.9mn in the first half of this year and, although it remains lossmaking, it has raised its growth prospects for the year.Fung’s journey into the world of start-ups was unusual. The Sydney-sider spent five years at Macquarie, the Australian bank and asset manager, but decided to switch careers. Having been a child model, he first joined a fashion agency in 2009. There, he encountered Peter O’Connell, a telecoms industry veteran who was setting up Amaysim, a virtual mobile network operator, and Fung joined in 2010 to get what he calls an “MBA in how to grow a start-up”.The biggest criticism of Airtasker — similar to that levelled at other gig economy companies — is that the tasker is not paid adequately, compared with a fully-employed professional. Unions have argued that companies such as Airtasker are exploiting a subclass of workers.

Fung admits the company was once guilty of focusing on building its customer base and not thinking of the taskers’ perspective. “If you think about Uber or Deliveroo, it’s very much ‘how do we make this cool customer thing’ and, ‘we’re going to have put a bunch of pressure on a bunch of riders and drivers to make that true’,” he acknowledges.However, his company works with taskers with good reputations to avoid a race to the bottom. Fung says 70 per cent of jobs posted on the platform are not handed to the cheapest bid, indicating customers are willing to pay more for service quality. He recalls watching Uber founder Travis Kalanick talking about how his company would make more money when autonomous cars were able to operate without a driver. Fung says it would be a bad thing for his company, and the taskers, if robots replaced human cleaners and other jobs. Airtasker is also sometimes criticised by professionals who say their income has been undercut by enthusiastic amateurs, who take small bites — such as replacing a tap — out of their businesses. But Fung does not expect Airtasker to replace household services such as plumbing or cleaning, despite competing with them for small jobs. He believes the value of Airtasker is in the “long tail of niche services” that will expand the overall size of household services, as people apply skills to small jobs — such as spider removal or getting a drone out of a tree.With Airtasker, Fung hopes to make it easier for people to get these odd jobs done: “In five to ten years time we will look back and think ‘wasn’t it crazy that it was so hard?’” More

When upmarket Waitrose is scrapping with Asda over its value range, it’s clear no one is immune from the effects of the cost of living crisis. Supermarkets aren’t going to be at the sharp end. But they’re in for a squeeze nonetheless. Grocers sometimes do well out of inflation. Consumers are primed to expect price rises, and supermarkets have in the past been successful at passing them on. Both Tesco and J Sainsbury have profited during previous periods of increasing prices. This time is going to be different, and not just because anti-poverty campaigner Jack Monroe will call out any egregious rises. The effects of inflation on the supermarket sector can be complex. But broadly, a little light inflation is good so long as purchasing power holds up, as was the case during the Brexit-induced food price rise of 2017. We are clearly well past that point now. The UK faces the biggest one-year fall in living standards in more than 60 years. Food prices, already rising at their fastest annual pace in more than a decade in February, are likely to advance further. Almost 60 per cent of food and drink producers said they had to pass on increases in March, more than any other sector. A third of Britons are already buying less when grocery shopping. Consumers will trade down. The big four of Tesco, Sainsbury’s, Asda and Wm Morrison insist they have learnt the lessons of the financial crash, when they passed on price rises, maintained margins — and permanently ceded market share to discounters Aldi and Lidl, which went from bit-players to the driving force of the UK grocery market. Former Tesco boss and now Morrisons chair Sir Terry Leahy said earlier this year that the UK was “past the peak of the disruptive effect of discounters”. Supermarkets, he said, had learned how to compete. They might know how, but it is going to come at a cost. The big four understand they have to convince consumers of their value credentials to keep as much of the spend in store as possible. Consumers prefer not to switch. “The priority for grocers is to offer a broad enough range of both premium and lower-priced budget options in key product categories so customers can trade down in those categories where they want to save,” explained Kien Tan, a senior retail adviser at PwC. But the two German groups are now within touching distance of 20 per cent market share, figures from NielsenIQ show. Sales declines at Asda and Morrisons, meanwhile, have been particularly brutal, down 9.9 per cent year-on-year at Morrisons and 8.7 per cent at Asda. The traditional players have narrowed the price gap with the discounters, once up to 25 per cent, thanks to what HSBC analyst Andrew Porteous calls a decade of “restructuring and repositioning”. But Asda and Morrisons, both traditionally catering to value-conscious consumers, were perceived to have fallen behind on their budget offerings. Asda’s investment of £45mn in its new “Just Essentials” range unveiled last week is evidence it understands some pain on prices is needed to shore up sales. Debt burdens assumed in their private equity buyouts over the past two years may constrain both retailers, however, even if Asda last week reported annual profits for 2021 of £1bn. Higher petrol prices — and fuel margins — will cushion only some of the blow. As much as the discounters, though, the other big problem for the sector is one of their own: Tesco. Tesco has been on a tear. Most groups have suffered declining market share — but Tesco’s held steady over one year and increased over two. That gives it even more of an advantage than its scale already brings when negotiating with constrained suppliers. Analysts expect it to report its biggest annual pre-tax profit in eight years next week. Discounts offered through its Clubcard Prices loyalty scheme already make it the cheapest of the bunch, but more than anyone else it can afford to swallow inflationary cost increases in an effort to capture extra customers.Where Tesco goes, others will have to follow. Investment in narrow value ranges is one thing, but a resurgent Tesco could apply pressure to hold back prices far more broadly. Even something short of a price war could inflict pain across the sector. Prepare for a [email protected]@catrutterpooley More

A spate of lockdowns in Shanghai and other Chinese cities is piling severe pressure on transport and logistics across the country, exacerbating the economic fallout of the government’s commitment to its zero-Covid policies as cases continue to soar to record levels.The disruption has affected the trucking industry in particular, which plays a critical role in transporting goods between cities and to some of the world’s biggest ports but is now subject to severe restrictions on drivers and deliveries to locations with positive cases.“Trucking is the main issue we have,” said Mads Ravn, executive vice-president and global head of air freight procurement at DSV, one of the world’s largest freight brokerages. He added that booking truck services was close to impossible and that flight activity into Shanghai Pudong airport was just 3 per cent of its rate last month with air cargo shipments limited to essential goods such as medicine.“Basically everything else is not moving but is being diverted away from Shanghai to other parts of China. It’s affecting every commodity you can think of,” he said. “It will have a global effect on almost every trade.”China is grappling with its worst coronavirus outbreak since it first emerged in Wuhan more than two years ago. On Wednesday, the country recorded 20,614 confirmed cases in the previous 24 hours — its most cases in a single day. In late March Maersk, the Danish shipping company, warned that the city’s lockdown measures would reduce trucking services in and out of Shanghai by 30 per cent. But since then, restrictions, which were initially supposed to cleave the city in two for a staggered nine-day lockdown, have grown more severe and overrun, enveloping the whole city at once. It is unclear when the measures will be relaxed.Danish shipping group Maersk warned last month that Shanghai’s lockdown measures would reduce trucking services in and out of the city by 30% © Qilai Shen/BloombergThe measures, which in Shanghai have led to a chorus of complaints over the difficulty of obtaining food as drones survey empty streets, have also been more widely implemented in China as officials struggled to contain the worsening outbreak. Nomura, the Japanese bank, this week estimated that 23 cities and almost 200m people were under full or partial lockdown.“These figures could significantly underestimate the full impact, as many other cities have been mass testing district by district, and mobility has been significantly restricted in most parts of China,” said Ting Lu, chief China economist at Nomura.Bo Zhuang, a Singapore-based analyst at Loomis Sayles, an asset manager, said: “Many of the entry and exit points on the highways between provinces are blocked, and there has not been a co-ordinated effort between the various provincial governments to ease the supply chain crunch.”

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Express delivery companies in Anhui and Jiangsu provinces, both in the east of the country and close to Shanghai, told the Financial Times that packages could not be delivered to any areas reporting locally transmitted cases, including Shanghai. Orders from Taobao, an online marketplace popular with Chinese consumers, were subject to delays because of lockdown measures.Apart from domestic disruption, analysts warned that any inland logistical bottlenecks would eventually result in ocean shipping delays because of the build-up in goods and orders — and that the associated costs would surface when the measures were finally loosened.“Once Shanghai reopens, it’s déjà vu of the story we’ve seen so many times,” said Lars Jensen, chief executive of Vespucci Maritime, a consultancy. “There will be a surge of volumes and upwards pressure on spot rates.”On Wednesday, the latest economic data signalled the effects of the recent escalation in controls, with the China Caixin service PMI showing the worst month-on-month contraction in March since early 2020.

There is no evidence of unusually long vessel queues outside of the world’s largest port in Shanghai, which authorities said was operating a “closed loop” system where workers did not leave their work premises after their shift ended. But cargo volumes through the port tracked by FourKites, a supply chain data firm, had dropped by about a third since March 12 as importers and exporters rerouted freight. China Daily, a state-run newspaper, said that goods were increasingly being sent into Shanghai by sea because many neighbouring cities had blocked truck drivers from entering. Maersk said last week that it could provide services via “barge or rail as alternative solutions for the corridor between Shanghai and nearby cities”.But Bo said this was only a “temporary solution” because as the virus spreads to more cities and provinces, those diverted channels would probably also be blocked off by lockdown measures.Additional reporting by Wang Xueqiao in Shanghai, Nian Liu in Beijing and Andy Lin in Hong Kong More

Treasury Secretary Janet Yellen cautioned Wednesday that Russia’s attack on Ukraine “will have enormous economic repercussions for the world.”
She added that the U.S. is working with global organizations to provide aid to Ukraine and sanctions against Russia.
Yellen also reiterated the White House’s commitment to the battle against the Covid-19 pandemic, stressing vaccine availability and readiness to address outbreaks.

Treasury Secretary Janet Yellen cautioned Wednesday that Russia’s attack on Ukraine could cause a major hit to the global economy.
“Russia’s actions, including the atrocities committed against innocent Ukrainians in Bucha, are reprehensible, represent an unacceptable affront to the rules-based global order, and will have enormous economic repercussions for the world,” Yellen told a House of Representatives panel in a hearing on the world’s financial system.

Along with that dour outlook, Yellen said global organizations such as the International Monetary Fund and World Bank are working together to provide aid to Ukraine and sanction Russia.

U.S. Treasury Secretary Janet Yellen testifies before a House Financial Services Committee hearing on “the State of the International Financial System,” on Capitol Hill in Washington, U.S., April 6, 2022.
Tom Brenner | Reuters

She added the White House believes Russia should be cut off from the global financial system in retribution for its “brutal and unprovoked invasion of Ukraine.”
“It cannot be business as usual for Russia in any of the financial institutions,” Yellen said.
However, she noted that European nations are still reliant on natural gas from Russia, necessitating the need for licensing of Russia-based companies.
Earlier in the morning, the administration outlined a fresh round of sanctions against Russia, including penalties against President Vladimir Putin’s children and prohibitions on new investment in Russia.
Along with the comments on the war, Yellen reiterated the White House’s commitment to the battle against the Covid-19 pandemic, stressing vaccine availability and readiness to address outbreaks.

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BENGALURU (Reuters) – The U.S. dollar will remain dominant for now so long as the Federal Reserve stays a hawkish course on interest rate hikes and its intentions to unload some of its pandemic-related bond purchases, according to a Reuters poll of forex strategists.The dollar index, which gained nearly 7% against major currencies last year, continued its stellar performance and has risen another 4% so far this year, with about half of those gains in March alone.Much of that strength was driven by comments from Federal Reserve officials who in addition to calling for 50-basis point rate rises are also speaking openly about forcefully reducing the size of its nearly $9 trillion balance sheet.That has driven U.S. Treasury yields to multi-year highs and investors into dollar-denominated assets, a key part of the strong dollar trade that is not expected to fade any time soon, keeping the currency well-bid.Market speculators’ net long bets on the dollar rose to an 11-week high in the latest week, according to U.S. Commodity Futures Trading Commission data released on Friday.More than two-thirds of analysts who answered a separate question, 37 of 53, said the strong dollar trade would last for at least another three months, including 17 who said more than six months. Thirteen respondents said under three months and the remaining three said the trade is already over.”We’ve got some aggressive tightening coming up this year from the Fed. We think the fed funds rate will probably hit 3% in the first quarter of next year, but (they could) even be cutting rates by the final quarter of 2023,” said Chris Turner, global head of markets research at ING.”I think the dollar could hold onto its gains for a lot of 2022…(and) we shouldn’t be starting to look for weakening in the dollar until perhaps, next spring-summer 2023.” (Graphic: Reuters foreign exchange poll – April 2022 – https://fingfx.thomsonreuters.com/gfx/polling/znpneqmwxvl/Reuters%20foreign%20exchange%20poll%20-%20April%202022.png) That view lines up with median forecasts in the April 4-6 poll of over 80 forex strategists who expected the greenback to eventually cede some of its gains to other currencies.But there are plenty of reasons for delay, not least of which is the Russia-Ukraine war, which has sent the cost of energy and commodities spiralling higher, with Europe in particular feeling the pinch. “We see developments in the energy market as the most important upfront negative for EUR/USD – elevated prices are not going away any time soon,” noted George Saravelos, global head of FX research at Deutsche Bank (DE:DBKGn).”On the flipside, further Fed repricing is becoming incrementally less beneficial to the dollar, the ECB has exceeded our (hawkish) expectations and Europe’s fiscal response to offset the near-term growth impact looks sizeable.”The euro was forecast to erase its over 4% losses for the year and rise to $1.14 in 12 months, a view analysts have held onto for more than two years. The common currency has not gained against the dollar for three months in a row since September 2020.(For other stories from the April Reuters foreign exchange poll:) More

ORLANDO, Fla. (Reuters) -The U.S. dollar’s share of world currency reserves continues to ebb slowly – but reserve stashes are only one measure of its dominance of global finance, and there’s no realistic scenario where that gets derailed any time soon.Central banks and private businesses need their rainy day funds to be in liquid assets that are easily accessible, in currencies that are widely accepted and in plentiful supply, and in jurisdictions with an internationally recognized rule of law. The dollar meets all those criteria. No other currency comes close, even though the share of central bank reserves and global trade flows is increasingly being spread across a wider range of currencies.The International Monetary Fund’s latest cut of central bank reserves shows that the dollar’s slice of the pie at the end of last year – before Russia’s invasion of Ukraine and freezing of Moscow’s FX reserves – was 58.8%. That’s down from 59.2% the prior quarter and the lowest since comparable data were first tracked in 1999/2000. This is a long-term trend – the dollar’s share of known, or ‘allocated’ reserves was over 70% in 2002. Bank for International Settlements data show that the dollar was bought or sold in roughly 88% of global foreign exchange transactions in 2019. That has remained pretty steady over the past 20 years.A U.S. Federal Reserve paper in October showed that about 60% of international and foreign currency liabilities and assets – primarily claims and loans, respectively – are denominated in dollars. This share has remained pretty stable since 2000.On trade, around 40% of global transactions in goods are invoiced in dollars. Global trade hit a record high of $28.5 trillion in 2021, according to the United Nations Conference on Trade and Development.The 2000-2020 period was marked by China’s rise to global economic superpower, surging dollar reserves demand from Asia after the 1997 crisis, and an explosion in globalisation and cross-border capital and trade flows. These forces will be nowhere near as strong in the next 20 years, so demand for dollars will ebb, even if only slowly and at the margins – but so too will demand for all other reserve currencies. And in the relative world of currencies, that doesn’t mean the greenback will lose out.”You still need an alternative. Don’t forget, it took two World Wars and loss of Empire for sterling to lose its status as the world’s No. 1 reserve currency,” said Paul Donovan, chief economist at UBS Global Wealth Management.”UNASSAILABLE” Debate over the dollar’s future reserve status has intensified, with both sides broadly represented by two leading academics – University of California, Berkeley, professor Barry Eichengreen, and Columbia University professor Adam Tooze. Eichengreen and his colleagues argue that the dollar’s unique status will gradually diminish as a more multipolar world takes shape. Central bank reserve managers have been undertaking “active portfolio diversification” into ‘non-traditional’ currencies for years, they said in an IMF working paper https:// last month. Tooze doesn’t dispute this, but argues https:// that many of these currencies – such as Canadian and Australian dollars – are “very much part of America’s extended financial security system,” protected and bolstered by dollar swap lines between their central banks and the Fed. If the United States was in direct economic or military conflict with Russia or China, it’s clear which side most of these countries would be on. The only two credible, long-term rivals to the dollar for official reserves or ‘vehicle currency’ use – invoicing in a currency that is neither that of the importer or exporter – are China’s yuan and the euro. But there are myriad reasons why it will take years before they are viewed as safe, liquid, and accessible as the dollar.The euro has a shortage of high-quality assets central banks can use as a store of value, there is still no euro zone-wide government-backed asset, and some international investors may be put off by the internal politics of a 19-nation bloc.In China’s case, it could be decades – the yuan is not fully convertible overseas and it is highly doubtful Beijing would welcome the currency appreciation that would likely follow.Joey Politano, an analyst at the U.S. Bureau of Labor Statistics and author of a personal economics blog, simply states that the dollar’s reserve currency status is so strong “as to be nearly unassailable.” No other country has the “proper mixture of deep capital markets, clear rule of law, massive economic size, and technological dynamism.”Related columns:- Russia central bank freeze may hasten ‘peak’ world FX reserves: Mike Dolan (Reuters, March 2)- China may balk at unnerved reserves seeking yuan: Mike Dolan (Reuters, March 18)(The opinions expressed here are those of the author, a columnist for Reuters)(By Jamie McGeever; Editing by Andrea Ricci) More

The South American country’s price index, which rose 2.9% in February, is showing a slower increase since President Nicolas Maduro’s government began easing foreign exchange controls to allow a wider circulation of hard currency, leading to more stable prices.The accumulated increase of prices in the last 12 months reached 284.4% at the end of March, while inflation in the first quarter was 11.4%, according to Reuters calculations based on official data, showing rising prices are still among the main problems affecting many families in the country.Venezuela experienced hyperinflation until last year. Minimum wage in the country is the equivalent of $30 per month.Inflation was pushed up in March by higher prices of communication and education services, according to the data.The inflation’s deceleration trend could be reversed following the implementation this month of a tax to operations in hard currency, a move by Maduro to boost the government’s income. Venezuela’s Finance Observatory this week reported problems to implement the tax by stores and companies, adding that the measure is creating ground for higher prices. More

WASHINGTON (Reuters) – As the world’s wealthy democratic powers roll out new sanctions against Russia in response to horrifying images of executed Ukrainians in the city of Bucha, it has become clear that the easiest options are now exhausted and stark differences have emerged among allies over next steps. The European Union proposed a first stab at curbing Russia’s energy sector in response to its invasion of Ukraine launched in February, banning imports of Russian coal. But EU countries remain divided even over this move, much less restricting imports of Russian oil and gas that are more important to their economies. The United States and Group of Seven allies announced new sanctions on Russia’s largest lender, Sberbank, more state-owned enterprises and more Russian government officials and their family members, cutting them out of the U.S. dollar-based financial system.The United States also has banned Americans from new investment in Russia and barred Moscow from paying sovereign debt holders with money in U.S. banks. Although Russia’s heavily restricted rouble rallied to a six-week high on Wednesday, U.S. Treasury officials say the sanctions are starting to turn Russia back into an austere, 1980s Soviet-style closed economy, But the U.S. sanctions contain carve-outs allowing Russia to continue collecting revenue from energy exports, which can help fuel its Ukraine invasion. U.S. Treasury Secretary Janet Yellen told U.S. lawmakers on Wednesday that stronger curbs on Russian energy are not yet possible for European allies dependent on Russian oil and gas. Russia supplies around 40% of the European Union’s natural gas consumption, which the International Energy Agency values at more than $400 million per day. The EU gets a third of its oil imports from Russia, about $700 million per day. “We are at the point where we have to take some pain,” said Benn Steil, international economics director for the Council on Foreign Relations think tank in New York. “The initial batches of sanctions were crafted as much to not hurt us in the West as much as they were to hurt Russia.” (Graphic: Russia’s biggest oil customer: China by far – https://graphics.reuters.com/UKRAINE-CRISIS/SANCTIONS/dwpkrldklvm/chart.png) The divisions in Europe have become more apparent this week. After Lithuania announced on Saturday it would stop importing Russian gas for domestic consumption, Austrian Finance Minister Magnus Brunner voiced opposition to sanctions on Russian oil and gas, telling reporters in Luxembourg that these would hurt Austria more than Russia.NEXT STEPSLack of unity on curbing energy imports means that options are limited to increase pressure further, but the investment ban announced on Wednesday could push more multinational firms to leave Russia, said Daniel Tannebaum, a former compliance officer at the Treasury’s Office of Foreign Assets Control.”You could outright start banning trade in more industries,” a move that would cut Russians off from more types of Western products such as pharmaceuticals, similar to a luxury goods ban imposed in the early days of the war, said Tannebaum, who leads consulting firm Oliver Wyman’s anti-financial crime practice.The United States has been pushing European allies to inflict more pain on Russia while trying to make sure that the alliance against President Vladimir Putin does not fray, a balance that only gets tougher. “You’ve kind of hit the ceiling – on both sides of the Atlantic – for what can be done easily and what can be done in short order,” said Clayton Allen, U.S. director at the Eurasia Group political risk consultancy, referring to the sanctions.To move to a tougher round of sanctions, U.S. officials will need to provide some assurances to European countries that energy markets and supplies can be stabilized to avoid severe economic hardship, Allen said. An economically weakened EU helps no one, Allen added. “If Western Europe is plunged into a recession, that’s going to drastically limit the amount of support – both moral and material – that they can provide to Ukraine,” Allen said.U.S. Secretary of State Antony Blinken is expected to press the case for more actions in Brussels this week at NATO and G7 meetings of foreign ministers. U.S. Deputy Treasury Secretary Wally Adeyemo held similar meetings last week in London, Brussels, Paris and Berlin.There also are still loopholes to close, including continued sales by German and French companies into Russia, and the ongoing hunt for luxury yachts and other assets parked by Russian oligarchs, according to one European diplomat involved in sanctions talks. More