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Monday, 5 September 2022

Central banks across the world will continue hiking interest rates this week

The global economy holds its breath for another batch of aggressive rate hikes: Major central banks are gearing up for a series of rate hikes this week as they continue to battle spiraling inflation, Bloomberg writes. Market watchers are anticipating rate hikes this week from the European Central Bank — which is widely expected to go for an uncharacteristically aggressive 75 bps hike — as well as in Canada, Australia, Chile, and at least five other countries. The US Federal Reserve will follow later this month, with most analysts forecasting a 50-basis-point increase or even another jumbo 75-bps hike.

Global food prices dipped for a fifth consecutive month in August, thanks in part to the UN-backed agreement to re-open Ukrainian ports, an improved production outlook for some grain growers, and an easing of export restrictions in some countries, according to fresh data from the UN Food and Agriculture Organization (FAO). The FAO food price index declined 2.7 points m-o-m to register 138.0 points in August — down from March's record high of 159.7 but still 10 points above where it was a year ago. Food prices have surged this year on the back of the war in Ukraine and Western sanctions on Russia, which have curbed the supply of basic foods and fertilizers and caused prices to surge.

EM bond issuance was slightly less terrible in August: Emerging markets raised USD 3.1 bn in hard-currency sovereign bonds in August, rebounding from July when no new sales took place, according to Tellimer. This takes the total amount raised in the first eight months of the year to USD 61.5 bn, around half the amount in the same period in 2021. EM issuances have been hit this year as the fallout from the war in Ukraine and rising rates globally hit market sentiment.

SIGN OF THE TIMES- SPAC investors will be in line for some USD 75 bn in redemptions over the next six months as blank check firms reach their two-year expiry dates. (FT)

Up

EGX30

9,997

+0.6% (YTD: -16.3%)

Up

USD (CBE)

Buy 19.17

Sell 19.28

None

USD (CIB)

Buy 19.20

Sell 19.26

None

Interest rates CBE

11.25% deposit

12.25% lending

Up

Tadawul

12,194

+0.4% (YTD: +8.1%)

Up

ADX

9,755

+0.4% (YTD: +14.9%)

Down

DFM

3,394

-0.6% (YTD: +6.2%)

Down

S&P 500

3,924

-1.1% (YTD: -17.7%)

Up

FTSE 100

7,281

+1.9% (YTD: -1.4%)

Up

Euro Stoxx 50

3,544

+2.5% (YTD: -17.5%)

Up

Brent crude

USD 93.02

+0.7%

Down

Natural gas (Nymex)

USD 8.79

-5.1%

Up

Gold

USD 1,722.60

+0.8%

Up

BTC

USD 19,853

+0.4% (YTD: -57.0%)

THE CLOSING BELL-

The EGX30 rose 0.6% at yesterday’s close on turnover of EGP 920.6 mn (5.3% above the 90-day average). Foreign investors were net sellers. The index is down 16.3% YTD.

In the green: Madinet Nasr Housing (+5.5%), Ezz Steel (+3.2%) and Eastern Company (+3.0%).

In the red: Rameda (-2.8%), Telecom Egypt (-1.0%) and CIB (-0.4%).

Asian markets are mixed this morning, with major indexes in Japan, Shanghai and Hong Kong in the red while Korea’s Kospi and Australia’s ASX are in the green. Futures suggest the Euro Stoxx 50, Frankfurt’s DAX 30, and the FTSE 100 will all open in the red later today, with just Paris’ CAC 40 bucking the trend. The New York Stock Exchange and Toronto Stock Exchange are closed today for the labor day holiday.

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