TOP NEWS SUMMARY: UK adds to global inflation picture ahead of US Fed

(Alliance News) - The following is a summary of top news stories ...

Alliance News 16 June, 2021 | 10:40AM
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(Alliance News) - The following is a summary of top news stories Wednesday.

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COMPANIES

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Regeneron Pharmaceuticals noted results from a UK trial which showed an antibody cocktail can reduce the risk of death in some sufferers of Covid-19. REGEN-COV, which consists of casirivimab and imdevimab, reduced the risk of death by 20% in hospitalised patients who were yet to see their own immune response. The probe, part of the UK Recovery trial, met its primary endpoint, Regeneron noted. The New York-based biotechnology firm added it is the "first trial to demonstrate that any antibody treatment improved survival in patients hospitalized with Covid-19". "Regeneron will share new data with regulatory authorities immediately and request that the US emergency use authorisation be expanded to include appropriate hospitalized patients," Regeneron said.

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US carrier Southwest Airlines was ramping operations back up Tuesday after cancelling some 500 flights following a second major outage in 24 hours due to computer issues. The Federal Aviation Administration issued a 45-minute nationwide ground stop at the airline's request that concluded at around 1830 GMT, an FAA spokeswoman said in an email. "Today, we've proactively cancelled roughly 500 flights due to the outage, and we're working with those customers to get them to their destinations as quickly as possible," a Southwest spokesman said. The issue is the second in less than a day for the domestic-focused carrier, which delayed more than 1,400 flights across the US on Monday due to problem with a third-party weather data provider. A cyberattack is not suspected as a cause, a Southwest spokesman said.

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Oracle reported surging income in the fourth quarter and believes its MySQL database is ripe to start stealing clients from Amazon.com. In the three months to May 31, Austin, Texas-headquartered database management firm recorded net income of USD4.03 billion, up sharply from USD3.12 billion a year before. Diluted earnings per share improved to USD1.37 from USD0.99. Total revenue in the fourth quarter rose 8% year-on-year to USD11.23 billion from USD10.44 billion. Cloud services & licence support revenue increased 8% to USD7.39 billion, cloud licence & on-premise licence revenue was up 9% to USD2.14 billion, while services revenue was up 11% to USD812 million, but hardware revenue slipped 2% to USD882 million.

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Intel advised shareholders to reject Tutanota's mini-tender offer. Tutanota is looking to purchase up to 1.0 million Intel shares for USD63 each. Shares in Intel closed 0.3% lower at USD57.99 on Tuesday in New York, and edged upwards to USD58.00 in after hours. "The offer price of USD63 per share is conditioned on, among other things, the closing price per share of Intel's common stock exceeding USD63 per share on the last trading day before the offer expires. This means that unless this condition is waived by Tutanota, Intel stockholders who tender their shares in the offer will receive a below-market price," Intel stated.

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MARKETS

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Markets were effectively on hold Wednesday, as traders awaited the US Federal Reserve policy decision at 2 pm in Washington, 1800 GMT. This will be followed by a press conference with Fed Chair Jerome Powell at 2:30 pm. With rising inflation expected to eventually prompt discussions about tapering of monetary stimulus among members of the Federal Open Market Committee, the UK added further evidence of price pressure globally, with consumer inflation exceeding the Bank of England's target of 2.0%, while producer prices hinted at more to come. Input price inflation in the UK showed "clear pressure on prices of raw materials, fuel and transport pushing up the cost of goods for producers," commented Mike Owens, global sales trader at Saxo Markets. "This is pretty ominous and echo's last week's comments from [BoE Chief Economist] Andy Haldane that further high street inflation can't be far behind."

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CAC 40: up 0.1% at 6,646.68

DAX 30: down 0.2% at 15,705.05

FTSE 100: up 0.1% at 7,179.09

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Hang Seng: closed down 0.7% at 28,436.84

Nikkei 225: closed down 0.5% at 29,291.01

S&P/ASX 200: closed up 0.1% at 7,386.20

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DJIA: called down 0.1%

S&P 500: called marginally lower, down 0.50 point

Nasdaq Composite: called up 0.1%

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EUR: unchanged at USD1.2127

GBP: up at USD1.4104 (USD1.4088)

USD: down at JPY109.95 (JPY110.08)

GOLD: down at USD1,859.27 per ounce (USD1,860.80)

OIL (Brent): up at USD74.13 a barrel (USD73.70)

(currency and commodities changes since previous London equities close)

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ECONOMICS AND GENERAL

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China's retail sales grew in May, industrial production expanded, and unemployment ticked down marginally. However, the growth in both retail sales and industrial output was below market forecasts. According to the National Bureau of Statistics, retail sales increased 12% year-on-year in May, disappointing market forecasts of 14% growth, according to consensus cited by FXStreet. Retail sales had risen 18% yearly in April. Meanwhile, industrial output rose 8.8% annually in May, a hair below forecasts of 9% growth. Industrial production was 9.8% higher yearly in April. China's urban, surveyed unemployment inched down to 5.0% in May, from 5.1% in April, according to NBS figures. A year earlier, the unemployment rate stood at 5.9%.

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A handful of damaged fuel rods is behind a build-up of radioactive gases at a nuclear power station in southern China, authorities said, describing the problem as "common" with no need for concern. CNN reported earlier this week that the US government was assessing a report of a leak at the Taishan plant in China's southern Guangdong province, and the station's French operator Framatome reported a "performance issue". There has been an increase in radioactivity in one of the plant's two nuclear power units due to five damaged fuel rods, said a joint statement by China's environment ministry and the National Nuclear Safety Administration. The ministry said that the increase in radioactivity is "within the permitted range of stable operation" for nuclear power plants, and "there is no issue of radioactive leakage to the environment". Earlier this week, French energy utility EDF – the majority owner of Framatome – also had blamed the build-up of gases in one of Taishan's reactors on the deteriorating of coating on some uranium fuel rods.

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Japan's trade deficit was reduced in May from a year before, according to figures from the Ministry of Finance. The country's trade deficit was chopped to JPY187.15 billion, about USD1.70 billion, in May, from JPY856.75 billion in May 2020. The latest figure disappointed market estimates. FXStreet-cited consensus tipped a slimmer deficit of JPY91.2 billion. Imports grew 28% annually to JPY6.45 billion, while exports rose 50% to JPY6.26 billion. Separate data, from the Cabinet Office, showed Japan's machinery orders grew in in April, though at a slower pace than expected. Machinery orders were 18% higher monthly, recovering some of March's lost ground when they had plunged 30% from February.

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UK consumer prices jumped in May, with inflation exceeding the Bank of England's 2% target for the first time in nearly two years. The Office for National Statistics said the UK consumer price index rose 2.1% on an annual basis in May, accelerating from 1.5% growth in April. May's annual inflation print was the highest reading since the same 2.1% growth rate was registered in July 2019. Consumer price growth has remained below 2% ever since then. The Bank of England targets a 2% inflation rate. Month-on-month, UK consumer prices rose 0.6% in May to match April's rate of growth. A separate release from the ONS showed UK producer price inflation also strengthened in May. Output prices grew 4.6% in the year to May, accelerating from growth of 4.0% in April, while input prices jumped 11% on a 12-month basis, again ticking up from April when prices grew 10%. May's input price growth was the highest rate since September 2011.

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EU member states have agreed to lift coronavirus travel restrictions on travellers from eight countries and territories including the US, officials and diplomats said. The white list of countries and regions exempted from the travel ban will be expanded to include Albania, North Macedonia, Serbia, Lebanon, the US, Taiwan, Macau and Hong Kong, they said. EU member states can still choose to require travellers from these areas to undergo Covid-19 testing or to observe periods in quarantine, but once the new list is approved the recommendation is that they should be exempted from a blanket travel ban. Because of the pandemic, the EU closed its external borders in March 2020 for non-essential travel, and for the past year has drawn up a regularly updated list of non-member states whose residents are allowed to travel to Europe. Japan, Australia, Israel, New Zealand, Rwanda, Singapore, South Korea and Thailand were already on the approved list.

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The US death toll from Covid-19 surpassed 600,000 on Tuesday, although authorities hailed progress towards a return to normality as its world-leading vaccination program promised to turn the page on one of the worst health crises in its history. The US has racked up by far the largest national death toll – ahead of Brazil and India – after a heavily-criticized early response to the pandemic, but has since organised among the world's most effective vaccine roll-outs. Progress against the coronavirus was underlined as New York announced more than 70% of adults had received at least one vaccine dose and the last of the state's restrictions could be lifted.

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The US state of California - the first US state to enact a stay-at-home order just under 15 months ago - celebrated its "reopening day" Tuesday by lifting almost all pandemic-related social distancing and capacity limits. Vaccinated people will be free to ditch their masks in nearly all of the nation's richest and most populous state, though exceptions will remain for locations including public transport, schools and hospitals.

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US President Joe Biden and his Russian counterpart Vladimir Putin may extend their talks in Geneva if necessary, a top Kremlin official said on Wednesday ahead of the much-anticipated summit. "The agenda is so extensive that certainly, it will be very challenging to limit it to four or five hours of talks," Kremlin spokesperson Dmitry Peskov told state television. The two leaders are expected to talk with top officials present, although they may also hold one-one-one discussions, Peskov said. "Putin always expresses himself clearly in outlining the 'red lines' for the Russian Federation, especially in such a difficult conversation that lies ahead today," Peskov was cited as saying by state news agency TASS.

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A US federal court judge on Tuesday halted plans by Biden's administration to suspend new oil and gas leases on federal land. Back in January, Biden issued an executive order calling on the pause of new oil and natural gas leases on public land. This was to allow the "completion of a comprehensive review and reconsideration of federal oil and gas permitting and leasing practices", the order read. In March, plaintiffs, including the state of Louisiana, filed suit against the government as a result of the executive order. A court filing showed 12 other states were included. In his verdict, judge Terry Doughty commented: "The omission of any rational explanation in cancelling the lease sales, and in enacting the pause, results in this court ruling that plaintiff states also have a substantial likelihood of success on the merits of this claim."

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By Tom Waite; thomaslwaite@alliancenews.com

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