Give Me Love (Give Me Peace On Earth)                             27 January 2023

The 2,786 real estate and properties transactions totalled US$ 2.29 billion, during the week, ending 27 January 2023. The sum of transactions was 285 plots, sold for US$ 463 million, and 2,043 apartments and villas, selling for US$ 1.201 billion. The top two transactions were for land, the highest in Al Safouh Second, sold for US$ 38 million, and the other for a plot in Al Thanyah Fifth, for US$ 33 million. Al Hebiah Fifth recorded the most transactions, with 135 sales worth US$ 113 million, followed by Al Yufrah 1, with fifty-six sales transactions, worth US$ 90 million, and Al Yufrah 2, with twenty sales transactions, worth US$ 6 million. The top three transfers for apartments and villas were Palm Jumeirah were for US$ 23 million, the next in Al Bada for US$ 13 million and in Al Mezhar First for US$ 11 million. The mortgaged properties for the week reached US$ 425 million, whilst sixty properties were granted between first-degree relatives worth US$ 213 million.

This week, Damac Properties officially announced the launch of Damac Bay by Cavalli, located in Dubai Harbour. The project, designed by the Cavali brand, is a forty-two storey, triple- tower property which will offer a range of 1 B/R to 5 B/R super-luxury duplexes and will highlight a Cavalli-inspired bridge that coils across its rooftops; the first thirty-two floors will house all units from 1 B/R to 3 B/R, whilst the 3 B/R to 5 B/R units will be found  on the upper floors. All residents will have access to a white-sanded private beach and a range of food and beverage outlets, whilst the towers’ podium level will have a maritime getaway in the form of an elegantly crafted water maze and snorkelling excursions. Other features will include three infinity pools, at the top of each tower, a rooftop area fitted with a state-of-the-art opera pavilion and the showpiece enormous water fountain located in the central tower.

According to AirDXB, there has been a surge in homeowners, who previously were renting in the short-term rental market, turning to long-term contracts. Consequently, there is a reduced supply of short-term rentals available, which in turn will see rents inevitably rising higher and the short-term rental sector becoming more attractive. The premier short-term rentals company noted marked increases last year, with occupancy levels topping 99% in March, dipping to 87% over the next six months, before rising to 90% in September and 93% in Q4. The most popular areas for short-term rentals continue to be Dubai Marina, JBR, Downtown Dubai and Bluewaters Island, with Palm Jumeirah remaining a hotspot.  It sees the likes of JLT, JVC, Business Bay and Meydan are becoming more attractive because of their proximity to hubs and the fact they are cheaper alternatives. Dubai has always been a magnet for entrepreneurs and investors and as its popularity surges, and with tourist numbers also quickly heading north, the outlook for the sector is bullish.

Last week, Emirates announced a major ramp up in operations to China – this week it seems to be Australia’s turn. As another indicator of the marked upturn in global air travel, the carrier is to operate sixty-three weekly services to the land Down Under, with a 55k capacity. Commencing on 26 March, the world’s largest long-haul airline will increase daily services, from two to three flights from via Singapore to Melbourne, and will also restart services to Christchurch, via Sydney; it will also add a third direct service to Sydney from 01 May. These additional flights will offer more than 500k additional seats to and from Australia in a year.

Speaking to Australia’s ABC, Tim Clark, the president of Emirates, noted that “I would say you will get to that (lower pricing) in the middle of next year, maybe even sooner.” With Chinese tourists travelling for the first time in three years, this will keep demand high but that consumers could see cheaper flight prices by mid-next year, once the airline industry gets back to “equilibrium”. He indicated that airlines would need to hit the “sweet spot of price” that ensures what consumers pay is “commensurate with the margins that the business needs to sustain itself”, but once equilibrium is restored, prices will be readjusted lower. However, he added the caveat that “whether they’ll go down to pre pandemic (levels), I don’t know.”

Dubai Health Authority posted that the emirate is home to nearly 4.5k private medical facilities – 45% higher than five years ago in 2018. Included in that total, there were fifty-six hospitals, fifty-seven day-care surgery centres, fifty-nine diagnostic centres, twenty-one specialised centres for People of Determination, and 1.6k specialised outpatient clinics. The facilities also include 417 school clinics, 154 home healthcare agencies, nine fertility centres, six dialysis centres, three cord blood and stem cell centres, a gastrointestinal endoscopy centre, forty-nine dental laboratories, seventeen telehealth centres, four patient transfer service centres, fifty-seven facilities for traditional, complementary and alternative medicine, 1.4k pharmaceutical facilities, seventeen medicine storage facilities, and 410 optical centres. It has also seen a 61% hike in licensed medical professionals to reach 55.2k last year and expects that this figure could grow by between 10% – 15% this year. According to the latest Medical Tourism Index, Dubai ranks No. 1 in the MENA region and sixth globally for medical tourism, with the city ranking fifth globally on the sub-index of Quality of Facilities & Services.

This week, the FTA announced that it will start early corporate tax registration for certain categories of companies and that they would receive invitations to register using the Emara Tax platform for digital services; this early registration phase will be in place until May at which time, the tax authorities will open the process for other companies and businesses. The FTA will provide more information about registration for corporate tax “in due course”. Introduced a year ago, and starting, as from 01 June 2023, the new federal tax will have a 9% rate on all registered companies, with a profit of over US$ 102k, (AED 375k), i.e. taxable profits below that threshold will be subject to a zero rate. The tax will not apply on salaries or other personal income from employment. In comparison to other developed countries, the UAE tax rate stacks up well, with the Tax Foundation in Washington DC estimating that the average tax rates for countries in the EU and OECD are 21.3% and 23.04%. It also Indicated that corporate tax rates have declined over the past forty years, with the global average down from more than 40% to between 25%-30%.

Following two major US$ 7.4 billion investments last year – at DP World’s flagship UAE assets, Jebel Ali Port, Jebel Ali Free Zone, and National Industries Park – Moody’s has upgraded DP World’s ratings, a sure indicator of investor confidence in the company’s business and future prospects. The ratings agency noted that its diversified global port operations in strategic, fast-growing emerging market locations, solid profitability, and long-term growth potential were the main drivers behind the improved rating.

According to Mohamed Al Hadari, the listing of eleven companies on the country’s bourses in 2023 will raise more than US$ 2.18 billion, and, in addition, four free-zone entities and two special purpose acquisition companies (SPACS) are in the listing pipeline. The deputy chief executive of the Securities and Commodities Authority also commented that the next two years will see “significant growth and development in the local markets and IPO markets.” It is expected that these listings will boost the liquidity of local capital markets, attract more retail investors and improve trading efficiency. He also concluded that “it will also make the UAE markets even more attractive to foreign investors, who are investing in the future of one of the best-performing economies in the world.” The quicker than expected rebound from the pandemic, and the high energy prices, buoyed the local markets, that last year witnessed twelve IPOs, raising US$ 11 billion. Of the twelve IPOs, four state-owned entities – DEWA, Salik, Empower and Tecom – raised US$ 8.3 billion, with DEWA “contributing US$ 6.1 billion of that total; in November, schools’ operator Taaleem also listed its shares on the DFM, raising US$ 205 million. The Dubai government also announced a US$ 545 million market maker fund to encourage the listing of more private companies from sectors such as energy, logistics and retail.

Last year, the seven listed banks in the UAE reported a combined net profit of US$ 9.03 billion, with the highest being First Abu Dhabi Bank, posting a figure 7.0% higher at US$ 3.65 billion. The leading two Dubai financial institutions were Emirates NBD and DIB – with profits 40.0% higher at US$ 3.54 billion, and by 26% to US$ 1.50 billion. The former’s profit was driven by strong regional economic growth and the success of its diversified business model, with its Q4 profit, at US$ 1.06 billion, up 94% year-on-year, attributable to improving margins and a lower cost of risk; total income came in 36.0% higher to US$ 9.95 billion, driven by increased transaction volumes and improved margins. International operations, accounting for 39% of the bank’s total income, helped the bank to diversify and expand its operations. Customer deposits rose 10.0%, year on year, to US$ 137.1 billion, while the total assets of the bank grew 8.0% to US$ 202.2 billion. Consequently, a 50% increase in dividends, to US$ 0.163 a share, was proposed

Emirates Islamic posted a 51% hike to a record profit of US$ 338 million, as total income climbed 33%, driven by “higher funded income and non-funded income with a significant reduction in the cost of risk reflecting the strong economic recovery.” The bank’s operating expenses increased 29% on the year, as it invests for future growth, with its total assets rising 15% to US$ 20,4 billion. There were also increases in both customer financing and customer deposits – by 14% to US$ 13.2 billion and by 19% to US$ 15.3 billion; current account and savings account balances remained at 74% of total deposits, with its non-performing financing ratio improving to 7.0%. It also posted that 38% of its total staff numbers are Emiratis.

Dubai Islamic Bank posted increased 2022 revenue and net profit figures – by 19.0% to US$ 3.84 billion and by 25.0% to US$ 1.49 billion; provisions for bad loans fell by 14.0% on the year to US$ 572 million, “demonstrating resilience of the financing book”. Overall, net financing and sukuk investments last year grew by 5.0% annually to US$ 64.9 billion, whilst total assets were more than 3% higher on the year at US$ 78.5 billion. The country’s biggest Sharia-compliant lender by assets, which recorded its strongest ever year, proposed a 30% dividend.

Assisted by the current property boom, Deyaar posted a very credible 184% surge in net profit last year to US$ 39 million, as revenue rose 62.0% to US$ 220 million; in the year, total assets grew 7.0% to US$ 1.68 billion. The company, majority owned by Dubai Islamic Bank, invested US$ 708 million in developing the Midtown project in Dubai Production City, and also last year it completed a capital restructuring programme, as it wrote off accumulated losses worth US$ 463 million from previous years. During 2022, it received its final settlement payment of US$ 54 million relating to a long-standing dispute with master developer Limitless. It also has plans to invest US$ 82 million in three Al Furjan projects to build about four hundred residential units and hotel apartments.

The DFM opened on Monday, 23 January 2023, 51 points (1.5%) higher on the previous fortnight, shed 24 points (0.9%) to close on 3,329 by Friday 27 January. Emaar Properties, US$ 0.03 higher the previous fortnight, lost US$ 0.04 to close the week on US$ 1.56. DEWA, Emirates NBD, DIB and DFM started the previous week on US$ 0.65, US$ 3.50, US$ 1.52, and US$ 0.40 and closed on US$ 0.65, US$ 3.53, US$ 1.53 and US$ 0.40. On 27 January, trading was at 133 million shares, with a value of US$ 73 million, compared to 107 million shares, with a value of US$ 48 million, on 20 January 2023.

By Friday, 27 January 2023, Brent, US$ 9.03 (11.1%) higher the previous fortnight, shed US$ 0.97 to (1.1%) to close on US$ 86.66.  Gold, US$ 125 (6.9%) higher the previous five weeks, rose a further US$ 18 (0.9%) to close, at 1,946, on Friday 27 January.

Airbus is planning to hire 13k new workers this year, with many of the vacancies being in technology roles, which will add a further 10% to its current payroll of 130k; of the new positions, 7k will be newly created posts, and the balance will be in Europe. About 25% of the jobs will be the fields of decarbonisation, digital transformation, software engineering and cyber technology, and 33% of the total will be young graduates.  In a statement, it posted that “we call on talented individuals from all over the world to join us in our journey to make sustainable aerospace a reality and to help us build a better, more diverse, and inclusive workplace for all our employees.”

An improved performance in Q4 2022 saw Boeing narrowing its 2021 loss, by 83.8% from US$ 4.1 billion to US$ 663 million on the year, driven by higher commercial deliveries. Over the period, the plane maker posted a 35% hike in revenue to almost US$ 20.0 billion, with a total company backlog of US$ 404 billion. The commercial plane division’s revenue increased 94% on the year to more than US$ 9.2 billion, driven by higher 737 and 787 deliveries; in Q4, the unit delivered 152 planes, with a backlog of more than 4.5k planes valued at US$ 330 billion. The company posted it is manufacturing thirty-one 737s per month, to be ramped up to fifty per month by 2025, whilst its 787 programme continues at a low production rate, reaching only five per month by Q4 2023 and ten per month by 2025. Its operating cash flow improved to over US$ 3.4 billion, from US$ 716 million.

The Chinese-owned London Electric Vehicle Company, owned by Geely, announced a major investment to become a high-volume, all-electric brand, with a range of commercial and passenger vehicles. LEVC’s Chief Executive Alex Nan confirmed “Geely will make consistent investments into LEVC because this is a very unique project.” This comes after the company, badly mauled by the pandemic, laid off 130 staff last October. The Chinese owners took control of its UK subsidiary in 2013, and to date has invested US$ 620 million building a hybrid US$ 82k taxi model which has a battery providing 103 km of range and a petrol range-extender giving an extra 480 km. Meanwhile, it announced that it would look for other investors for its zero-emission portfolio and would consider partnering with other carmakers to develop new technology. Its Coventry factory has the capacity to build 3k taxis a year, running on a single shift, that could easily be increased to 20k. LEVC is exploring a range of commercial and passenger car models on a common electric platform, and can lean on other group brands that already have EVs to “move forward in a fast, agile way”. In its portfolio, Geely boasts Lotus, Volvo, Polestar – via a joint venture with Volvo – and Zeekr, which has just filed for an US IPO, in December.

Despite the global economy heading to a marked slowdown, demand for luxury cars heads in the other direction, with the likes of Rolls Royce, Bentley and Lamborghini witnessing increased 2022 sales – by 8% to 6.0k units, 4% to 15.2k and 10% to 9.2k respectively. Sales were boosted because there was increased demand for EVs, a greater selection of SUVs made by high-end brands, as well as the option to customise new cars.

LVMH posted strong sales, driven by the holiday shopping season, with a second straight record year, with Q4 revenue 9.0% higher to US$ 25 billion – and this despite geopolitical tensions and high cost of living. The world’s biggest luxury group reported that stronger sales in Europe, US and Japan made up for losses in China due to ongoing Covid lockdowns, as its Asian business witnessed a 20% decline in the first nine months of the year. The French conglomerate, whose brands include Tiffany’s, Christian Dior, Sephora, Hennessey and Moët, noted that its flagship brand Louis Vuitton posted record revenue of US$ 21.7 billion. The company is seen as a bellwether for the sector, with forecasts that the personal luxury market will grow at least 3-8% this year, even given a downturn in global economic conditions.

Millions of users were impacted on Wednesday when Microsoft Corp was hit with a networking outage that took down its global cloud platform Azure, along with services such as Teams and Outlook., with only China and its platform for governments not being hit. The tech giant later discovered the problem involved network connectivity affecting clients on the internet to Azure, as well as connectivity between services in datacentres. It later confirmed that it had rolled back a network change that it believed was causing the issue. This is not the first time that the platform has had issues – the second largest cloud services provider, after Amazon, faced outages last year. Among the services affected were Microsoft Teams, (used by 280 global million users), Microsoft Exchange Online, SharePoint Online, and OneDrive for Business,

Two of the world’s leading payments companies, Visa and MasterCard, posted healthy results, with the former reporting a 6.0% rise in net profit to US$ 4.2 billion because of higher payment volumes, cross-border transactions and processed transactions; revenue was up 12.0% to US$ 7.9 billion. The company’s cash, cash equivalents and investment securities stood at US$ 18.9 billion, at the end of 2022. Over the last three month of the year, the company recorded a 10% increase in processed transactions to 52.5 billion. Over the three-month period, Visa repurchased 15.6 million shares, at an average price of US$ 198.74 each, for US$ 3.1 billion, with US$ 14 billion of remaining authorised funds for share repurchase as of 31 December. Its board of directors declared a quarterly cash dividend of US$ 0.45 a share

MasterCard posted a 6.0%, year on year, hike in Q4 net profits to US$ 2.5 billion, but flat quarter on quarter. Revenue increased by 12.0% to US$ 5.8 billion, driven by a boost in cross-border transactions, (growing 31%), and a recovery in global spending; operating expenses rose 10.0% to US$ 2.6 billion. In the quarter, the aggregate dollar amount of purchases made with MasterCard-branded cards, surged 11%. The company’s diluted earnings per share rose 9% to US$ 2.62, whilst its share value, almost 11% higher YTD, nudged up 0.7% to US$ 385 in yesterday’s trading. For the year, net income was 14.0% higher at US$ 9.9 billion, as revenue climbed 18.0% to US$ 22.2 billion.

It has been more than a bad week for Gautam Adani who started last Monday as the world’s third richest person and ended today as the seventh; he is still worth some US$ 97.6 billion. To say that the Indian billionaire is in trouble is an understatement, with seven of his listed companies losing US$ 48 billion in market cap, and US bonds of his companies also tanking, following a scathing report by Hindenburg Research which had flagged concerns about debt levels and the use of tax havens. It also noted that the conglomerate was on a “precarious financial footing”, and that “sky-high valuations” had pushed the share prices of seven listed Adani companies as much as 85% beyond actual value. The rout took shares of Adani Enterprises, the group’s flagship company, well below the offer price of its record US$ 2.45 billion secondary sale starting today which had initially been offered at a discount. The company had set a floor price of US$ 38.18 a share and a cap of US$ 40.19. But on Friday, the stock slumped to as low as US$ 33.28— well below the lower end of the price offering. It is reported that Indian regulators are studying the US report as it continues to probe into offshore fund holdings of the Adani Group. There are valid concerns that there will be a knock-on impact on the Indian market and for Indian banks, with exposure to the Adani empire; there are estimates that in the fiscal year ending last March, they are exposed to about 40% of the US$ 24.5 billion of Adani Group debt.

In a bid to deter gold smugglers, Indian authorities are planning to slash the import duty on gold, as illicit gold imports boomed after COVID-19, impacting badly on the official market whose market revenue, including those of banks and refiners, plummeted. If this were to happen, and the fact that it would make gold purchases cheaper, it would greatly benefit not only the retail sector, ahead of peak demand season, but also the operations of domestic gold refineries, as well as supporting global prices. Last July, the Modi government decided to lift the basic import duty by 5.0% to 12.5% to support the sinking rupee and help bring down the growing trade deficit. The effective rate now stands at 18.45% when the likes of the 2.5% agriculture infrastructure development levy and other taxes are added. This rise has been a godsend for smugglers, who had struggled the prior two years because of the pandemic and travel restrictions; their market price undercuts current official domestic rates by some US$ 40 per oz. In the first eleven months of 2022, 3.1k tonnes of “illegal” gold was seized by customs and other agencies – the highest amount since pre-Covid. It was also reported that December imports were a marked 79% down on the year – its lowest level in over twenty years – and a sure sign that the government should take immediate action,

The ECB’s President Christine Lagarde is in the news again, this time warning that China’s reopening is “something that will be a positive for China mostly, something that will be a positive for the rest of the world, but we will have inflationary pressure on many of us, simply because the level of energy that was consumed by China last year was certainly less than what they will consume this year”. There is no doubt that she could be right but the fact that China is returning to some sort of normalcy, the opening of supply chains will be a driver in reducing inflation. The IEA has also noted that there will indeed be more competition for natural gas purchases which would push prices north again.

Meanwhile, the central bank, which had raised rates four times last year, bringing its deposit rate to 2%, also confirmed that said it would be increasing rates further in 2023 to address sky-high inflation, with every likelihood of two separate 0.50% rate hikes next month and in March; there are also signs that the ECB will continue to raise rates in the months thereafter if inflation rates still hover near double digit levels. Although the rate has dipped last month to 9.2%, with November also seeing a slight decline, it is still well above the bank’s 2.0% target.

A UBS survey concluded that Australian supermarket prices rises speeded up over the last quarter ending 31 December, with food prices at their two major supermarkets up 9.2% on the year. Meat prices were up 10%, (with pork 16% higher) and lamb (up 10%) leading the way, whilst dairy prices rose 14% over the year, driven by a 24% surge for cheese and an 18% hike in butter; however, milk production continues to fall, down 7%. Fruit and vegetable prices stabilised in the quarter. Woolworths posted the biggest price increases, rising by 0.9% to 9.3%, on the quarter, followed by Coles that saw a quarterly hike of 1.0% to 9.1%.  The bank’s Evidence Lab tracks the online prices of more than 60k different products at Australia’s two main supermarket groups and noted that Coles prices were marginally lower because of its aggressive discounting to try and make up some of the market share it had lost in recent times. Woolworths has generally raised food prices more than its main rival Coles over the past four years, but of late this has changed with Coles’ price rises 9.8% higher, year on year, to its rival’s 8.9%.  Although many expect inflation to have already peaked, it is expected price pressures will be slower to follow suit. On Wednesday, official figures saw the CPI rise to 7.8% on the year, and 1.9% on the quarter. The biggest increases were seen in domestic holiday travel and accommodation (13.3%), electricity (8.6%), and international holiday travel and accommodation (7.6%).

Another week and another record for Lebanon, with news that inflation reached 171.2% as the country endures its worst ever economic crisis; this rose 6.7% from November’s return and 122% on the year. The main drivers behind these shocking figures are triple digit jumps in communication, food, water and energy costs. Bad as it is, the current inflation mark has some way to go before it reaches its 741% 1987 peak during the country’s fifteen-year civil war ending in 1990 and is behind Sudan’s 741% level posted in 2021  – and its 180% hike forecast for last year. The economic melee has seen Lebanese fleeing the country, as unemployment tops the 50% level, with more than half the population sliding below the national poverty line. Easy as it sounds, the country could receive a US$ 3 million IMF assistance package, (which would release a further US$ 11 billion package by international donors), conditional on the formation of a new government, the election of a president and political consensus across political lines. To date, nothing has happened even after the six-year term of former president Michel Aoun expired at the end of October and the absence of a cabinet, eight months after the last elections.

Mainly attributable to rising interest rates on its debt, as well as having to support households with their energy bills, UK December borrowing costs hit record levels, topping US$ 157 billion – the highest ever figure since records started in 1993. Borrowing – the difference between government spending and government receipts – reached US$ 33.8 billion, with interest costs, almost doubling on the year to US$ 21.0 billion. The ONS said total public sector debt reached US$ 3.08 trillion at the end of December, equating to 99.5% of GDP – a level last seen over sixty years ago. Although gas prices have started to decline, they are still almost double what they were before February 2022, the month Russia invaded Ukraine; these price hikes are the main driver behind why inflation is surging; It is estimated that the government’s Energy Price Guarantee scheme, which limits average household bills to US$ 3.1k per year, along with it cutting energy bills in by US$ 493 this winter, added a further US$ 8.6 billion to December’s borrowing figures. Furthermore, since many gilts are “index-linked”, the government’s repayment has risen since they rise in line with the Retail Prices Index measure of inflation which is currently at double-digit levels. There is no doubt that the Chancellor, Jeremy Hunt faces a Herculean task to get the public finances back to some form of normality, with borrowing at unprecedented levels, along with debt interest payments, government spending too high, and the economy in a marked downturn.

Today, he set out a plan to help lift the UK’s economic growth, but warned it is “unlikely” that there will be room for any “significant” tax cuts in the Budget, whilst admitting what everybody already knew, that the country was going through “a difficult patch”, but insisted the country “can get through it and we can get to the other side”. The Chancellor reckons that “the biggest tax cut that we can give the British people is to halve inflation, that means the value of their weekly shop won’t continue to go up, and the value of their pay packet won’t continue to be eroded”. His plan would focus on four pillars, or “four Es” – enterprise, education, employment and everywhere – with the Institute of Directors adding a fifth – empty because his strategy  did not include any concrete plans and lacked any substantial detail.

It still remains a conundrum on how he can boost economic growth and cut inflation levels, (which at 10.5% is still five times more than the BoE’s 2.0% target), to get public debt levels much lower. Another quandary is that the BoE uses the Consumer Price Index as its measuring base, whereas the government has the Retail Price Index as its guideline when it comes to measuring inflation. In November, the CPI was at 10.7% whilst the RPI came in 3.3% higher at 14.0%. The government issues “gilts”, also known as bonds, to suit big investors such as private pension funds, whose pay-outs to customers are linked to RPI and therefore need an asset linked to it. Why does the government continue to pay higher debt issue than going for a cheaper option?

The chances of the UK and EU changing their post-Brexit relationship are slim, a new report has found, with Changing Europe (UKICE) concluding that there was little chance of either of the two parties changing their post-Brexit relationship – and this despite the island nation’s economy being badly hit by the change and the fact that recent polls would support a move back into the bloc. Even three years after the UK left the dysfunctional EU, discussions are still ongoing on the final outcome of implementing Brexit, with the main area of dispute involving the management of the largely open border between Northern Ireland, which is part of the United Kingdom and EU member, Ireland. There are still major problems in other sectors including financial services, fisheries and energy. The report noted that relations were “far from either settled or stable”, but it indicated that neither side seemed likely to want to reassess the 2020 Trade and Cooperation Agreement.

Despite the pressure of high interest rates and widespread fears of a looming recession, in Q4, the US economy expanded at 2.9%, on an annual basis; however, this was 0.3% lower than the previous quarter’s figure of 3.2%. The money seems to be on a similar reduction in the current quarter, perhaps followed by a weak recession in Q2. Overall annual growth was 2.1%, down from 5.9% a year earlier. Such better than expected figures do point to the probability of further rate hikes, starting with 0.25% next week, and that they could remain at these higher levels in the short-term. Although inflation has declined from 9.1% to 6.5%, over the past four months, the figure is still more than triple that of the Fed’s 2.0% target,  whilst unemployment is set to rise by over 30% from 3.5% to 4.6% by the end of this year.

This week, the US announced that it would send thirty-one M1 Abrams battle tanks to help Ukraine in its war against Russia, after the Biden administration U-turning on its original stance of arguing that the tanks would be difficult to deliver, expensive to maintain and challenging for Ukrainian troops to operate.  Finally, Germany has agreed to initially send fourteen Leopard 2 tanks, (but a total of 114 over an unspecified period of time), in a move that will allow other European nations to send German-made tanks from their own stocks; this comes after months of Ukraine lobbying Western allies to send the military equipment. Ukraine’s President Volodymyr Zelensky said, “it was an important step on the path to victory”, with Russia condemning the moves as a “blatant provocation.” This could be a turning point in the war that would allow Ukraine regain momentum and regain land previously lost to the Russian aggressors. Unfortunately, this can only prolong the conflict, with the number of deaths, which already numbers tens of thousands, continuing to climb. So much for Give Me Love (Give Me Peace On Earth).