Severe droughts across the Northern Hemisphere-stretching from the farms of California to waterways in Europe and China-are further snarling supply chains and driving up the prices of food and energy, adding pressure to a global trade system already under stress.
Parts of China are experiencing their longest sustained heat wave since record-keeping began in 1961, according to China’s National Climate Center, leading to manufacturing shutdowns owing to lack of hydropower. The drought affecting Spain, Portugal, France and Italy is on track to be the worst in 500 years, according to Andrea Toreti, a climate scientist at the European Commission’s Joint Research Center.
Russia Probes Killing of Putin Ally’s Daughter
Russian officials opened an investigation into a car bombing outside Moscow this weekend that killed the daughter of a prominent, far-right Russian ideologue who has long called for Russia to seize Ukraine. There was no claim of responsibility, and a Ukrainian official denied that Kyiv played any role.
Russia’s Investigative Committee said it had launched a probe into the bombing, which killed Daria Dugina in what it described as a preplanned hit. The agency said the Toyota Land Cruiser she was driving exploded Saturday night at around 9 p.m. local time as the likely result of a bomb placed inside.
Variant-Targeted Covid-19 Boosters Test the Promise of mRNA Technology
The U.K. last week became the first country to clear a modified Covid-19 vaccine targeting the Omicron variant, and other countries including Canada and Australia might soon follow.
But in the U.S., modified Covid-19 booster shots are unlikely to be cleared for several more weeks because health authorities decided in late June they wanted modified vaccines to target different Omicron subvariants than those rolling out in other countries.
GLOBAL NEWS
Shrinking Deficits Cushion Fed’s Retreat From Markets
A shrinking federal budget deficit is providing a major boost to investors, enabling the Treasury Department to cut longer-term debt issuance despite the Federal Reserve’s recent move to buy fewer bonds.
The prospect of the Fed shrinking its bondholdings, a policy known as quantitative tightening, or QT, has long been a nagging concern for investors. While it’s early to conclude that the Fed maneuver won’t hit markets, the strong rally in stocks and bonds in recent months suggests that the relationships are more complicated than many analysts had assumed.
Chinese Banks Cut Rates to Spur Economic Growth
SINGAPORE-Banks in China cut benchmark interest rates on loans to households and businesses, a small attempt to help revive growth in an economy struggling with a property bust and Beijing’s zero-tolerance to Covid-19.
The People’s Bank of China last week unexpectedly trimmed two of its policy rates in response to slowing growth and feeble demand for credit. Changes to so-called loan prime rates, which are set by a panel of banks and represent the terms offered to the most creditworthy borrowers, usually follow soon after.
Fintech CFOs Seek Reliable Funding as Investors Pull Back, Demand Higher Yields
Fintech lenders are bolstering their funding options, seeking sources of capital that are sustainable through an extended downturn.
Financial technology firms-many of them set up in a low-interest-rate environment-in recent years found willing buyers for their loans, as financial institutions looked for investment opportunities.
Your Steak Is Getting Cheaper at the Supermarket
Beef is getting cheaper, bringing some economic relief to U.S. consumers.
Prices of beef, typically among the costliest grocery store purchases, are falling after more than a year of increases, as consumer demand softens for some cuts. Supplies are improving due to better staffing at meat plants, and supermarkets are offering more discounts on rib-eye, New York strip and other often-expensive products.
RBNZ Surprised by Strength of Inflation, Using Full Flexibility of Mandate
WELLINGTON, New Zealand-Stronger inflation pressures recently were a surprise for New Zealand’s central bank and the reason it has forecast that the cash rate will reach 4.0% sooner, monetary-policy committee member Adam Richardson said Monday.
“The inflation shock that is going on around the world continues to leak into domestic prices a bit more than we assumed,” Mr. Richardson said in an interview with The Wall Street Journal. “What we tend to find is that domestic inflation is a lot more persistent than the imported inflation.”
Write to nihad.ahmed@wsj.com.
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This article is a text version of a Wall Street Journal newsletter published earlier today.
(END) Dow Jones Newswires
August 22, 2022 07:14 ET (11:14 GMT)
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