South African President Cyril Ramaphosa has said leaders from six African countries will visit Moscow and Kiev in an attempt to end the war in Ukraine. The mission, which includes Zambia, Egypt, Senegal, Uganda and the Republic of Congo, was welcomed by Russian President Vladimir Putin in a phone conversation. Ukraine's President, Volodymyr Zelensky, also backed the initiative, according to Ramaphosa. China's government special representative for Eurasian affairs, Li Hui, will make a similar visit to the region this week, as hopes grow that a negotiated settlement can be achieved. The US has recently accused South Africa of providing weapons and ammunition to Russia, putting pressure on the country's stance of neutrality. South Africa also hosted a naval exercise with Russia and China in February.
Sonja Frisell’s production of Verdi’s ‘Aida’ will see its 262nd and final showing on May 6th at New York’s Metropolitan Opera. Frisell became fascinated with the story of the Ethiopian princess and Egyptian military captain as a child growing up in England, and directed her own staging in Rio de Janeiro in 1986. Her mammoth staging, the second-most performed production in the opera house’s 140-year history, will be succeeded by Michael Mayer’s production in the 2024-25 season, with sets by Christine Jones and projections by Michael Grimmer of 59 Productions.
Brazil's state-run oil company Petrobras is cutting refinery gate prices for diesel and gasoline by an average of 16%, which should help curb inflation and allow the central bank to lower interest rates. The petrol price cut is expected to reduce the official inflation index by 0.28 percentage points in May and June, while JPMorgan economists have revised their year-end inflation forecast down to 5.4% from 5.5% as a result of the price cuts. Brazilian President Luiz Inacio Lula da Silva has been urging the central bank to cut rates from a six-year high of 13.75%.
Brazil's "interiorization" program, which offers eligible applicants work permits and free flights to other parts of the country, has seen a surge in approvals in the post-pandemic period as Venezuelans desperate to leave their own country head to Brazil. The program eases pressure on Roraima, Brazil's far northern state, as it deals with the influx of Venezuelan migrants, and has relocated about 100,000 out of the 426,000 Venezuelans who have migrated to Brazil in the past decade. The Gonzalez family has just embarked on their migration journey to join other relatives working in construction in the southern Brazilian state of Paraná.
The European Union (EU) is seeking deeper ties with India amid pressures to reduce economic dependence on China. While Brussels is not looking to cut off ties with Beijing altogether, it intends to diversify its supply chains by reducing its reliance on China. This where India comes into play. During the first meeting of the EU-India Trade and Technology Council, the word “de-risk” was mentioned several times by both sides, indicating their shared goal to reduce economic dependence on China. The EU has plans to increase cooperation with India on quantum and high-performance computing while making their digital public services more compatible. "India has a population of 1.4 billion. So, we are an economy of scale, and the EU is an economy of skill — it's natural that these two power centers should come together," according to Swasti Rao, an associate fellow at the Indian government-funded think tank, the Manohar Parrikar Institute for Defense Studies and Analyses.
The International Monetary Fund has expressed its support for Brazil's efforts to improve its fiscal position, whilst applauding the country's sustainable, inclusive and green economy. The IMF views that broadening the tax base and tackling spending rigidities will support sustainability and credibility. Brazil's finance ministry recently unveiled new fiscal rules to balance limits on spending growth under President Luiz Inacio Lula da Silva's administration.
Brazil's Finance Ministry is exploring new initiatives to increase tax revenue, including a review of income tax deductions and exemptions, according to anonymous sources. The potential measures are hoped to improve Brazil's fiscal stability, which has been threatened by leftist President Luiz Inacio Lula da Silva's aim to direct more money towards social projects. The potential initiatives would include taxing company profits and dividends and changing the tax laws on some investment funds. The government estimates that due to exemptions, it is set to lose BRL51.1 billion ($10.2 billion) and BRL31.3 billion from deductions in its 2024 budget bill.
Speaker of the House, Kevin McCarthy (R-Calif.), has said that an ethics committee should investigate the case against Rep. George Santos (R-N.Y.), who was recently indicted for 13 financial crimes, instead of Democrats calling for him to be expelled. Rep. Robert Garcia (D-Calif.) had introduced a motion on Tuesday to expel Santos. Under House rules, the motion would require a vote, a move to table or referral to committee within two days. The measure has little chance of passing because it would need a two-thirds majority vote.
The pandemic has created the wrong sort of decoupling for emerging markets, hurting their performance over the past three years, warns John Authers in Bloomberg Opinion. However, he added "none of this means that there won’t be a decoupling; but it’s not going to be the panacea that many have long wanted it to be". If China becomes the pole of what is effectively a different financial system, reshoring and deglobalisation will create opportunities in the emerging world, but it will also make them much harder to take advantage of, warns Authers. Nevertheless, these markets are experiencing some signs of recovery after a decade of underperformance, following the brief bull market which came to an end in the Global Financial Crisis in 2008.
Meanwhile, there is concern over the budget strategies of the US. Ted Decker, CEO of Home Depot, expects comparable sales to drop as much as 5% this fiscal year — the first annual decline in 14 years. Despite problems so far being driven by unusual conditions such as the price of lumber falling, according to Authers, if the recession risks loom larger over the US economy, and workforces normalize with new return-to-office policies, then support will fade for such firms that have been doing so well during the pandemic’s economic conditions. This would spell the end of the trends that Authers calls the home-building boom, e-commerce and working from home/home improvement.
China's Tencent Holdings reported an 11% uptick in revenues to $21.4bn for Q1, better than forecasts, but net income of $3.99bn fell short of predictions. The firm grew online advertising 17% and profits from investment gains rose 23% in the first quarter, however, it faces competition in its core gaming and social media markets, as well as from fintech newcomers. Tencent intends to fill its empty pipeline with hits such as Valorant and will integrate artificial intelligence across its suite of products from WeChat to online media. In March, Tencent debuted Honor of Kings in Brazil, paving the way for a global roll-out.
The Group of Seven (G7) is discussing "economic coercion" ahead of the Hiroshima summit with China in mind. A central theme in the upcoming conference is increasing economic security with greater international cooperation to reduce dependence on China for supplying strategically important goods, such as semiconductors, materials for electric vehicle batteries, and pharmaceuticals. China has increasingly adopted this tactic, putting import tariffs on Australian produce following its call for an independent inquiry into the origins of COVID-19, and blocking trade with Lithuania after the opening of an office in Taipei. The G7 meeting is expected to result in policy documents on specific policies, including economic security.
Japanese Prime Minister Fumio Kishida will host meetings with the leaders of the Group of Seven (G7) countries from 3 to 5 December in Hiroshima, Japan,—a location that underscores the nation’s “commitment to world peace” just as China seeks a more assertive role in Asia. The meeting will take place amid rising tensions in the region which has been plagued with territorial disputes, nuclear threats by North Korea and growing concern over an increasingly powerful China. G7 leaders will address challenges such as escalating conflict between Ukraine and pro-Russian rebels, Japan's efforts to open up its own, heavily protected markets and revised global financial regulation. G7 countries comprising Germany, the US, Japan, the UK, France, Italy and Canada, will offer greater support to the Group of South to improve political and economic ties, and build further support to isolate Russia and stand up to China’s aggressive behaviour. Indian Prime Minister Narendra Modi will also be attending. Ancillary to the meetings, US President Joe Biden is scheduled to meet with Japanese Prime Minister Fumio Kishida and South Korean President Moon Jae-in to discuss regional security.
Brazil's former president, Jair Bolsonaro, has testified before federal authorities as part of an investigation into fake COVID-19 vaccination cards. The ex-leader denies any involvement and is among a number of Bolsonaro's inner circle, including several family members, to be probed over issues from election meddling to racial hate speech. The legal storm may result in a ban from public office for Bolsonaro or even his arrest, as Judge Alexandre de Moraes continues several investigations, although his attempt to connect the fake news inquiry and ongoing probe into vaccine cards has drawn criticism for his alleged efforts to concentrate power.
Hong Kong and mainland China saw negative growth in their ultra-high-net-worth individuals (UHNWIs) figures last year, while Singapore gained, according to a report by Knight Frank. Mainland China saw the greater decrease, dropping by 5.9%. This year, China saw a 49.8% surge, while Hong Kong should rebound to 7,280 by 2027, the report said. Referring to the 100 global prime residential markets, Liam Bailey, global head of research at the property consultancy, said: “Luxury investment assets grew 16% which helped to steady the decline."
The International Monetary Fund’s (IMF) First Deputy Managing Director, Gita Gopinath, has warned of significant risks that inflation will remain high or increase further in many emerging markets, and urged central banks to keep monetary policies tight. Gopinath highlighted that price pressures seem entrenched in many economies and upside inflation risks are significant. She noted that insufficient monetary tightening now may necessitate more painful actions down the road, and that fiscal restraint could support central banks’ fight against inflation. Gopinath also warned of heightened risks to emerging markets from monetary policy tightening in advanced economies, and underscored the need for emerging market authorities to continue to strengthen their monetary, fiscal, and financial policy frameworks.
The Emilia-Romagna Grand Prix, which was due to take place on May 21, has been cancelled due to severe flooding in Imola. The area around the circuit has been subjected to heavy rain, resulting in flood and landslide warnings, and the nearby Santerno river has risen, threatening the circuit. The fifth round of the Formula One world championship has been cancelled, with at least three people in the region having already been killed in floods, and more than 5,000 having been evacuated from their homes. As of Wednesday morning, the paddock had not been affected, although car parks and other areas nearby have experienced severe flooding.
Formula 1 personnel were forced to vacate the paddock on Tuesday, with the event officially confirmed as cancelled on Wednesday. Following surveys of the region, and in view of the fact that rain is expected to persist until Thursday, event organisers declared there was no option other than to cancel the Imola Grand Prix. A statement expressing sympathy with those affected by the floods was issued by Ferrari. Championship leader Max Verstappen offered his support for the cancellation, having taken the chequered flag in first place at the preceding round, held in Miami.
The Imola cancellation marks the first time this season that F1 has had to cancel an event. The season is set to proceed with the next race at the Monaco Grand Prix next weekend.
Hong Kong Exchanges and Clearing (HKEX) has said that Hong Kong will become a hub for both technological innovation and the internationalisation of the yuan, driven by offshore Chinese currency, which will support hi-tech listings. The Hong Kong stock market will meet rising investment demand created by the offshore yuan since China recently reached agreements with countries such as Brazil and Saudi Arabia to make trade payments in the currency, according to Ba Shusong, the chief China economist at HKEX. Shusong added that compared to Shanghai, Hong Kong's market is unique, with a large base of institutional and foreign investors, which will facilitate the internationalisation of the yuan and technology innovation.
Brazilian President Luiz Inacio Lula da Silva is being warned by senior allies that his focus on foreign policy and his forthcoming visit to the G7 Summit in Japan risks diverting him from domestic issues in a year when there is a great need to deliver results. Lula's people are understood to have told him that he should concentrate more on resolving Brazil's economic problems as his constant trips overseas are seen as having delayed decision-making at a time when the economy is flagging.
Brazil's antitrust regulator Cade has recommended that L'Oreal's acquisition of Natura & Co's Aesop brand be approved. L'Oreal agreed to buy Aesop for $2.53bn last month. The deal is considered definitively approved within 15 calendar days of its publication, providing no appeals are made.
Stellantis has become the first carmaker to urge the UK to renegotiate the terms of its Brexit deal. The parent company of car brands including Alpha Romeo, Peugeot, Vauxhall and Chrysler has called for a delay to beefed-up European Union (EU) “rules of origin”, saying that these could lead to it having to close its Ellesmere Port factory. The factory could be forced into closure as electric vans produced there, which comprise over 70% imported components, face a 10% tariff when they are exported to the EU from next year. Stellantis warned rising costs of raw materials, supply chains and the conflict in Ukraine had prevented it from meeting its planned content standards when announcing the expansion of the Cheshire plant in 2021. Car manufacturers across the UK and continental Europe have echoed its concerns over the rules of origin, which they claim will raise costs for EV drivers and reduce uptake.
