<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="740" height="416" src="https://cms.cnbcafrica.com/wp-content/uploads/2022/01/106817935-1609423998182-gettyimages-1230274603-AFP_8XN6K3.jpeg" alt="" class="wp-image-414659" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2022/01/106817935-1609423998182-gettyimages-1230274603-AFP_8XN6K3.jpeg 740w, https://cms.cnbcafrica.com/wp-content/uploads/2022/01/106817935-1609423998182-gettyimages-1230274603-AFP_8XN6K3-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2022/01/106817935-1609423998182-gettyimages-1230274603-AFP_8XN6K3-160x90.jpeg 160w" sizes="auto, (max-width: 740px) 100vw, 740px" /><figcaption>A pedestrian wearing a face mask delivers food to a homeless person sleeping in the entrance of a shop, closed due to coronavirus restrictions, in central London on December 23, 2020.
Tolga Akmen | AFP | Getty Images</figcaption></figure>



The pandemic has made the rich richer while the income of the rest of the world — about 99% of humanity — dropped, according to a new Oxfam report titled “Inequality Kills.”



The wealth of the world’s 10 richest men doubled from $700 billion to $1.5 trillion during the pandemic, the global charity said on Monday.



“It has never been so important to start righting the violent wrongs of this obscene inequality by clawing back elites’ power and extreme wealth including through taxation — getting that money back into the real economy and to save lives,” said Oxfam International’s Executive Director Gabriela Bucher.



<h3 class="wp-block-heading">Read more: <a href="https://www.cnbcafrica.com/2022/africa-joins-race-to-acquire-pfizers-covid-19-paxlovid-pills/">Africa joins race to acquire Pfizer’s COVID-19 Paxlovid pills</a></h3>



A 99% windfall tax on the pandemic gains of the world’s 10 richest men would raise enough money to pay for vaccines for the world — as well as finance various social measures for more than 80 countries, the report said.



The wealth of billionaires rose more since Covid started compared to the last 14 years, and a new billionaire was minted every 26 hours since the pandemic began, Oxfam said.



The CEOs of Covid vaccine-developers Moderna and BioNTech made billions in 2020 as a result of the pandemic.



At the same time, the vast majority of the population are worse off after losing income during Covid-19, and 160 million more people fell into poverty, the release said.



<h2 class="wp-block-heading" id="h-windfall-tax"><a></a>Windfall tax</h2>



One way to “claw back” the huge gains made by billionaires during the crisis is to tax the money that billionaires have made since the start of the pandemic, the report said.



“A 99% one-off windfall tax on the Covid-19 wealth gains of the 10 richest men alone would generate $812bn,” the report said.



“These resources could pay to make enough vaccines for the entire world and fill financing gaps in climate measures, universal health and social protection, and efforts to address gender-based violence in over 80 countries,” it also said.



<h3 class="wp-block-heading">Read more: <a href="https://www.cnbcafrica.com/2022/pfizer-ceo-says-two-covid-vaccine-doses-arent-enough-for-omicron/">Pfizer CEO says two Covid vaccine doses aren’t ‘enough for omicron’</a></h3>



Even after the tax, the world’s 10 richest men would still be billionaires and as a group, would have increased their wealth by $8 billion from the start of the pandemic, the report said.



“If these ten men were to lose 99.999 percent of their wealth tomorrow, they would still be richer than 99 percent of all the people on this planet,” said Bucher.



Beyond a one-off windfall tax, governments must also implement or increase permanent wealth and capital taxes to “fundamentally and radically reduce wealth inequality,” the report said.



The Oxfam report was released ahead of this week’s virtual World Economic Forum meetings, where world leaders are set to discuss global challenges.

106817935-1609423998182-gettyimages-1230274603-AFP_8XN6K3

‘Obscene inequality’: Oxfam says taxing the world’s richest could help save lives

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="740" height="416" src="https://cms.cnbcafrica.com/wp-content/uploads/2022/01/107002124-1642400332623-gettyimages-1363768434-ln5_7328_1e7a7a16-035e-496c-bfa8-7e21810e4cc3.jpeg" alt="" class="wp-image-414652" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2022/01/107002124-1642400332623-gettyimages-1363768434-ln5_7328_1e7a7a16-035e-496c-bfa8-7e21810e4cc3.jpeg 740w, https://cms.cnbcafrica.com/wp-content/uploads/2022/01/107002124-1642400332623-gettyimages-1363768434-ln5_7328_1e7a7a16-035e-496c-bfa8-7e21810e4cc3-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2022/01/107002124-1642400332623-gettyimages-1363768434-ln5_7328_1e7a7a16-035e-496c-bfa8-7e21810e4cc3-160x90.jpeg 160w" sizes="auto, (max-width: 740px) 100vw, 740px" /><figcaption>Britain’s Prime Minister Boris Johnson speaks with pupils in a maths class as he makes a constituency visit to Oakwood School on January 10, 2022 in Uxbridge, England. Leon Neal | Getty Images News | Getty Images</figcaption></figure>



LONDON — U.K. Prime Minister Boris Johnson’s position is looking increasingly vulnerable as more reports emerge of parties and gatherings in Downing Street during periods of Covid-19 lockdowns and restrictions.



Kier Starmer, the leader of the opposition Labour Party, accused Johnson of breaking Covid laws amid numerous allegations of parties and gatherings that were held by government staff, with some attended by Johnson, during lockdown.



In the last few days more reports of parties have emerged, with Downing Street apologizing to Queen Elizabeth after it has emerged that two parties took place on the eve of Prince Phillip’s funeral in April 2021, in which it’s alleged that a staff member was sent out to buy a “suitcase of wine.”



Speaking to the BBC on Sunday, Starmer said Johnson had “lied” about what he called “industrial scale partying” in Downing Street.



“The facts speak for themselves, and the country has made up its mind,” he said, adding it was “blindingly obvious what’s happened.”



“I think he broke the law, I think he’s as good as admitted that he broke the law,” he told the BBC.



<h3 class="wp-block-heading">Read more: <a href="https://www.cnbcafrica.com/2022/2022-will-be-the-year-of-vaccination-says-director-of-vaccine-institute/">2022 will be the ‘year of vaccination,’ says director of vaccine institute</a></h3>



Johnson admitted to Parliament last week that he had attended a drinks party at Downing Street, the prime minister’s office and which he lives next door to, during the U.K.’s first Covid lockdown in May 2020 but said he believed it was a “work event.”



Johnson has said that another picture showing him and his wife, as well as 17 Downing Street staff members, drinking wine and eating cheese in No.10′s garden at a separate event in May 2020 showed “people at work.”



A number of lawmakers within Johnson’s Conservative Party have called on the prime minister to resign, saying his position is now untenable as public anger has grown as more reports of parties being held in government buildings have emerged. Others have questioned Johnson’s judgment and the work culture in Downing Street.



Johnson’s closest minister in his Cabinet have remained loyal for now, saying that they will await the conclusions of an investigation being carried out by a senior civil servant, Sue Gray, into whether parties and gatherings took place in various government buildings and broke Covid rules.



The results of that inquiry could be released later this week. Sky News has published a list of the alleged parties here.



Conservative Party Chairman Oliver Dowden reiterated that position on Sunday, commenting to the BBC that “the task for us now is how we address the underlying culture in Downing Street” and that “we need to up our game, and that needs to be addressed, and I know the prime minister is committed to addressing that.”



<h2 class="wp-block-heading" id="h-what-johnson-has-said"><a></a>What Johnson has said</h2>



Showing how far the “partygate” scandal reaches, the U.K.’s most senior civil servant who was meant to investigate the alleged parties, Cabinet Secretary Simon Case, was forced to quit the investigation himself after it was revealed that a gathering was held in his own private office in December 2020, also breaking rules in place at the time.



Last week, Johnson admitted that he had attended a party billed as a “bring your own booze” gathering in Downing Street’s garden, to which around 100 people were reportedly invited, in May 20, 2020, during the U.K.’s first Covid lockdown.



At this time, people in the U.K. were only allowed to meet one other person from outside their household, and had to meet outdoors, among other strict rules.



Addressing a packed House of Commons (the lower House of Parliament) last week, Johnson offered his “heartfelt apologies” to the nation but defended himself, saying he had only attended the party for 25 minutes in order to “thank groups of staff” for their hard work and that he “believed implicitly that this was a work event.”



Addressing Parliament after Johnson’s admission, opposition leader Starmer said Johnson’s explanation for his attendance was “so ridiculous that it’s actually offensive to the British public” as he called on Johnson “to do the decent thing and resign.”



<h2 class="wp-block-heading"><a></a>Party ending for Johnson?</h2>



While the British media has doggedly sought to expose more details of parties, with details and photos of a number of them being leaked to the press, the British public has become increasingly angry as the gatherings took place invariably at times when people were not meant to socialize.



People who lost loved-ones during the pandemic have expressed outrage at the reports of parties, feeling they were robbed of precious moments with family while politicians flouted the rules.



Johnson has shown no signs, as yet, that he is considering his position in office, however. He has been out of the public eye in recent days due to a positive Covid test among his close family.



Whether more powerful members of his Cabinet move against Johnson in the coming days and mount a leadership challenge is now being closely watched but most Tory politicians have said they are awaiting the results of Sue Gray’s much-anticipated inquiry, for now.



How public anger plays out in local elections in the U.K. in May could well determine whether the Conservative Party moves against Johnson, if he does not resign.



<h3 class="wp-block-heading">Read more: <a href="https://www.cnbcafrica.com/2022/jj-booster-85-effective-against-omicron-hospitalisation-south-africa-says/">J&amp;J booster 85% effective against Omicron hospitalisation, South Africa says</a></h3>



Johnson and his government have also weathered political storms before and have garnered some credit for “getting Brexit done.” But Tory lawmakers will now be assessing whether they believe Johnson can win a future election, however, given low public trust in him.



Ruth Gregory, senior U.K. economist at Capital Economics, noted last Friday that “it is striking how quickly the political momentum has shifted” with Johnson likely to have gone from a position of “feeling smug about his decision not to ramp up the Covid-19 restrictions in the wake of the Omicron wave” to facing what she called “the most difficult days of his political career, with speculation rising that a leadership challenge is imminent.”



“With questions remaining over the parties in 10 Downing Street during Covid-19 lockdowns, the coming days, if not weeks, are likely to be marked by more political turmoil,” she noted, with two “flashpoints” ahead:



“First, the publication &#8230; of the report investigating whether the PM broke Covid-19 lockdown rules at parties in Downing Street. Second, the resignation of any Cabinet members. Regardless of what happens, we doubt this period of political instability will stall the economic recovery in the near term. The economy has performed well when uncertainty has been elevated in the past, including after the 2010 hung Parliament.”



Sterling has certainly seemed unmoved by political upheavals, remaining buoyant last week against the dollar, and is up 0.2% against the greenback year to date. On Monday morning, a pound was worth $1.3675.

107002124-1642400332623-gettyimages-1363768434-ln5_7328_1e7a7a16-035e-496c-bfa8-7e21810e4cc3

UK’s Boris Johnson in leadership crisis, accused of lying about ‘industrial scale partying’ during Covid lockdowns

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="740" height="416" src="https://cms.cnbcafrica.com/wp-content/uploads/2022/01/106999130-1641843212950-cov.jpg" alt="" class="wp-image-414548" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2022/01/106999130-1641843212950-cov.jpg 740w, https://cms.cnbcafrica.com/wp-content/uploads/2022/01/106999130-1641843212950-cov-300x169.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2022/01/106999130-1641843212950-cov-160x90.jpg 160w" sizes="auto, (max-width: 740px) 100vw, 740px" /><figcaption>People wait outside a community center as long lines continue for individuals for COVID-19 testing during the outbreak of the coronavirus disease (COVID-19) in San Diego, California, January 10, 2022. Mike Blake | Reuters</figcaption></figure>



The World Bank slashed its global growth forecast for 2022 and 2023, and cautioned that a rise in inflation, debt and income inequality could jeopardize the recovery in emerging and developing economies.



Global growth is expected to slow to 4.1% in 2022 and 3.2% in 2023 as more nations start unwinding unprecedented levels of fiscal and monetary policy support to tackle the fallout from the coronavirus pandemic, the bank said in its “Global Economic Prospects” report on Tuesday.



The projections follow a strong rebound in global growth as demand soared after Covid-related lockdowns lifted. The World Bank estimated that the world economy grew 5.5% in 2021.



<h3 class="wp-block-heading">Read more: <a href="https://www.cnbcafrica.com/2022/wef-report-warns-of-covid-inequalities-fueling-social-tensions-across-the-globe/">WEF report warns of Covid inequalities fueling social tensions across the globe</a></h3>



Major economies including the United States, China and countries in the euro zone are expected to slow down this year, the bank said. It added that a resurgence in Covid infections, due to the highly contagious omicron variant, will likely disrupt economic activity in the near term and could worsen growth projections if it persists.



Ongoing supply-chain bottlenecks, rising inflationary pressures and elevated levels of financial vulnerability in large parts of the world could increase the risks of a “hard landing,” the World Bank warned. A hard landing refers to a sharp economic slowdown following a period of rapid growth.



The World Bank is the first major global institution this year to come out with growth projections. The International Monetary Fund is expected to release its World Economic Outlook update on Jan. 25, Reuters reported.



<h2 class="wp-block-heading" id="h-growth-projections"><a></a>Growth projections</h2>



Growth in China is set to ease from an estimated 8% in 2021 to 5.1% this year, partly due to the lingering effects of the pandemic as well as additional regulatory tightening from Beijing, according to the World Bank.



Advanced economies are predicted to slow from 5% in 2021 to 3.8% in 2022, which the World Bank said will be “sufficient to return aggregate advanced-economy output to its prepandemic trend in 2023 and thus complete its cyclical recovery.”



On the other hand, emerging markets and developing economies (EMDEs) are expected to “suffer substantial scarring to output from the pandemic.” Their growth trajectories would not be strong enough to return investment or output to pre-pandemic levels by 2023, according to the report.



Broadly, EMDEs are predicted to slow from an estimated 6.3% last year to 4.6% in 2022. For some smaller nations or even countries that rely heavily on tourism, the economic output is expected to stay below pre-pandemic levels, the bank said.



<h2 class="wp-block-heading"><a></a>Worsening inequality</h2>



The coronavirus pandemic has worsened income inequality, particularly between countries, the World Bank said.



It referred to data that showed 60% of households surveyed in EMDEs experienced a loss of income in 2020, while those in low-income countries and in sub-Saharan Africa were hit the hardest.



Inflation, which tends to hit low-income workers the hardest, is running at levels not seen since 2008, the bank said. Rising prices will constrain monetary policy where many emerging and developing economies are withdrawing support to contain inflation before the growth recovery is complete, it added.



The pandemic also pushed total global debt to the highest level in half a century and it could complicate future coordinated debt relief efforts, the report said. The World Bank called for “global cooperation” to help developing economies expand their financial resources needed for sustainable development.



<h2 class="wp-block-heading"><a></a>Covid risks</h2>



Covid-19 continues to cast a shadow over growth prospects. If variants like omicron persist, it could further reduce the bank’s global growth projections, according to World Bank President David Malpass.



“Developing countries are facing severe long-term problems related to lower vaccination rates, global macro policies and the debt burden,” he said in opening remarks during the report’s launch.



“There’s a growing canyon between their growth rates and those in advanced economies. This inequality is even more dramatic in per capita and median income terms, with people in the developing world left behind and poverty rates rising,” he added.



“We’re seeing troubling reversals in poverty, nutrition, and health.”



<h3 class="wp-block-heading">Read more: IMF: <a href="https://www.cnbcafrica.com/2021/imf-poor-nations-could-face-economic-collapse-unless-g20-extends-debt-relief/">Poor nations could face ‘economic collapse’ unless G20 extends debt relief</a></h3>



Malpass also pointed out that a reversal in education from school closures will have a permanent, outsized impact on low and middle-income countries.



Since early 2020, there have been more than 300 million reported cases of Covid infections and over 5.5 million people have died. Vaccine rollout has been less than equitable, with poorer countries struggling to get an adequate supply of doses.



Information published by Our World In Data showed that while 9.49 billion vaccine doses have so far been administered worldwide, only 8.9% of people in low-income countries have received at least one dose.



Many international institutions, including the World Bank as well as the World Health Organization, have called for wider and more equitable distribution of vaccines in order to bring the pandemic under control.

106999130-1641843212950-cov

World Bank slashes global growth forecast and warns about growing inequality

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="548" src="https://cms.cnbcafrica.com/wp-content/uploads/2022/01/106909560-16261038642021-07-12t142211z_1583465413_rc2pvn9muo7k_rtrmadp_0_usa-economy-polaris-820x548.jpeg" alt="" class="wp-image-414471" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2022/01/106909560-16261038642021-07-12t142211z_1583465413_rc2pvn9muo7k_rtrmadp_0_usa-economy-polaris-820x548.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2022/01/106909560-16261038642021-07-12t142211z_1583465413_rc2pvn9muo7k_rtrmadp_0_usa-economy-polaris-300x200.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2022/01/106909560-16261038642021-07-12t142211z_1583465413_rc2pvn9muo7k_rtrmadp_0_usa-economy-polaris-135x90.jpeg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2022/01/106909560-16261038642021-07-12t142211z_1583465413_rc2pvn9muo7k_rtrmadp_0_usa-economy-polaris-768x513.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2022/01/106909560-16261038642021-07-12t142211z_1583465413_rc2pvn9muo7k_rtrmadp_0_usa-economy-polaris-1536x1026.jpeg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2022/01/106909560-16261038642021-07-12t142211z_1583465413_rc2pvn9muo7k_rtrmadp_0_usa-economy-polaris-scaled.jpeg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption>Photo: via CNBC</figcaption></figure>



The U.S. economy added far fewer jobs than expected in December just as the nation was grappling with a massive surge in Covid cases, the Labor Department said Friday.



Nonfarm payrolls grew by 199,000, while the unemployment rate fell to 3.9%, according to&nbsp;Bureau of Labor Statistics data. That compared to the Dow Jones estimate of 422,000 for the payrolls number and 4.1% for the unemployment rate.



Stock market futures&nbsp;edged lower following the report, while bond yields were in positive territory though off their highs of the morning.



Job creation was highest in leisure and hospitality, a key recovery sector, which added 53,000. Professional and business services contributed 43,000 while manufacturing added 26,000.



The unemployment rate was a fresh pandemic-era low and near the 50-year low of 3.5% in February 2020. That decline came even though the labor force participation rate was unchanged at 61.9% amid an ongoing labor shortage in the U.S.



A more encompassing measure of unemployment that includes discouraged workers and those holding part-time jobs for economic reasons slid to 7.3%, down 0.4 percentage points. Though the overall jobless rates fell, unemployment for Blacks spiked during the month, rising to 7.1% from 6.5%. The rate for women 20 years and older fell sharply, to 3.1% from 3.7%.



“The new year is off to a rocky start,” wrote Nick Bunker, economic research director at job placement site Indeed. “These less than stellar numbers were recorded before the omicron variant started to spread significantly in the United States. Hopefully the current wave of the pandemic will lead to limited labor market damage. The labor market is still recovering, but a more sustainable comeback is only possible in a post-pandemic environment.”



<h3 class="wp-block-heading" id="h-read-more-bitcoin-holds-steady-below-50-000-in-volatile-weekend-trading">Read more: <a href="https://www.cnbcafrica.com/2021/bitcoin-holds-steady-below-50000-in-volatile-weekend-trading/">Bitcoin holds steady below $50,000 in volatile weekend trading</a></h3>



Average hourly earnings rose more than expected as the U.S. sees its fastest inflation pace in nearly 40 years. Wages rose 0.6% for the month and were up 4.7% year over year. That compares to respective estimates of 0.4% and 4.2%.



While the establishment survey showed much lower than expected job gains, the household count told a different story, with a gain of 651,000. There also were upward revisions for prior months, with the final October tally pushed up to 648,000, an increase of 102,000, while November’s disappointing report gained 39,000 in its first revision to 249,000.



The data left the total employment level still 2.9 million shy of where it stood in February 2020, prior to the pandemic declaration. The labor force participation rate is 1.5 percentage points lower, representing a workforce decline of nearly 2.3 million for the period. There were nearly 4 million more jobs than there were unemployed workers through November.



The numbers “suggest that worker shortages were becoming a bigger restraint on employment growth, even before the Omicron surge in infections, which could knock hundreds of thousands off payrolls in January,” wrote Michael Pearce, senior U.S. economist at Capital Economics.



Other sectors seeing job gains included construction (22,000), transportation and warehousing (19,000) and wholesale trade (14,000).



Job creation for the year totaled 6.45 million, easily the highest aggregate gain on record going back to 1940.



The numbers come at a crossroads for the U.S. economy as more than half a million Covid cases per day, many related to the omicron variant, threaten to stall an economic recovery that looks to accelerate in 2022.



While growth decelerated through the summer, economists expect that GDP rose sharply at the end of the year, with&nbsp;the Atlanta Fed tracking 6.7% growth. Federal Reserve officials have been watching the data closely.



The central bank has indicated it will begin slowing the help it has been providing the economy since the pandemic began.



Friday’s report covered the week including Dec. 12, which came before the worst of an omicron spike that began heading into Christmas.



The BLS data conflicted strongly with a report earlier in the week from payrolls processing firm ADP, which said&nbsp;private payrolls surged by 807,000. Weekly jobless claims also have been trending near a 52-year low,&nbsp;mostly recently coming in at 207,000&nbsp;for the week ended Jan. 1.



Economist forecasts have been wildly inaccurate for the payrolls report and revisions have been substantial over the past four months.



In September, November and December, estimates overshot the actual counts by an average of nearly 223,000. For October, the estate was 198,000 below the final count.



Monthly revisions for 2021 through November added an average 101,000 to the final counts.



— CNBC’s Peter Schacknow and Steve Liesman contributed to this report.

106909560-16261038642021-07-12t142211z_1583465413_rc2pvn9muo7k_rtrmadp_0_usa-economy-polaris

Hiring falters in December as payrolls rise only 199,000, though the unemployment fell to 3.9%

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="461" src="https://cms.cnbcafrica.com/wp-content/uploads/2022/01/104138004-GettyImages-624164254-820x461.jpg" alt="" class="wp-image-414450" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2022/01/104138004-GettyImages-624164254-820x461.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2022/01/104138004-GettyImages-624164254-300x169.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2022/01/104138004-GettyImages-624164254-160x90.jpg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2022/01/104138004-GettyImages-624164254-768x432.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2022/01/104138004-GettyImages-624164254-1536x864.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2022/01/104138004-GettyImages-624164254.jpg 1600w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption>Photo: via CNBC</figcaption></figure>



Investors have been preparing for the Federal Reserve to start hiking interest rates. They also know the central bank is cutting the amount of bonds it buys each month. On top of that, they figured, eventually, the tapering would lead to a reduction in the nearly $9 trillion in assets the Fed is holding.



What they didn’t expect were all three things happening at the same time.



But minutes from the Fed’s December meeting, released Wednesday, indicated that may well be the case.



The meeting summary showed members ready to not only start raising interest rates and tapering bond buying, but also being prepared to engage in a high-level conversations about reducing holdings of Treasurys and mortgage-backed securities.



While the moves are designed to fight inflation and as the jobs market heals, the jolt of a Fed triple threat of tightening sent the market into a tailspin Wednesday. The result saw stocks give back their Santa Claus rally gains and then some as the prospect of a hawkish central bank cast a haze of uncertainty over the investing landscape.



Markets were mixed Thursday as investors tried to figure out the central bank’s intentions.



<h3 class="wp-block-heading">Read more: <a href="https://www.cnbcafrica.com/2022/global-markets-slump-on-hawkish-fed-minutes/">Global markets slump on hawkish Fed minutes</a></h3>



“The reason the market had a knee-jerk reaction yesterday was it sounds like the Fed is going to come fast and furious and take liquidity out of the market,” said Lindsey Bell, chief market strategist at Ally Financial. “If they do it in a steady and gradual manner, the market can perform well in that environment. If they come fast and furious, then it’s going to be a different story.”



Fed officials said during the meeting that they remain data-dependent and will be sure to communicate their intentions clearly to the public.



Still, the prospect of a much more aggressive Fed was cause for worry after nearly two years of the most accommodative monetary policy in U.S. history.



Bell said investors are likely worrying too much about policy from officials who have been clear that they don’t want to do anything to slow the recovery or to tank financial markets.



“The Fed sounds like they’re going to be a lot quicker in action,” she said. “But the reality is we don’t honestly know how they’re going to move and when they’re going to move. That’s going to be determined over the next several months.”



<h2 class="wp-block-heading" id="h-clues-coming-soon"><a></a>Clues coming soon</h2>



Indeed, the market won’t have to wait long to hear where the Fed is headed.



Multiple Fed speakers already have weighed in over the past couple days, with Governor Christopher Waller and Minneapolis Fed President Neel Kashkari taking a more aggressive tone. Meanwhile, San Francisco Fed President Mary Daly said Thursday she thinks the start of balance sheet reduction isn’t necessarily imminent.



Chairman Jerome Powell will speak next week during his confirmation hearing, and a second time this month following the Fed meeting on Jan. 25-26, when he may strike a more dovish tone, said Michael Yoshikami, founder and chairman of Destination Wealth Management.



One big factor Yoshikami sees is that while the Fed is determined to fight inflation, it also will have to deal with the negative impact of the omicron variant.



“I expect the Fed to come out and say everything is based on the pandemic blowing over. But if omicron really does continue to be a problem for the next 30 or 45 days, it is going to impact the economy and might cause us to delay raising rates,” he said. “I expect that commentary to come out in the next 30 days.”



Beyond that, there are some certainties about policy: The market knows, for instance, that the Fed starting in January will be buying just $60 billion of bonds each month — half the level it had been purchasing just a few months ago.



Fed officials in December also had penciled in three quarter-percentage-point rate hikes this year after previously indicating just one, and markets are pricing in close to a 50-50 chance of a fourth hike. Also, Powell had indicated that there was discussion about balance sheet reduction at the meeting, though he seemed to play down how deeply his colleagues delved into the topic.



So what the market doesn’t know right now is how aggressive the Fed will be reducing its balance sheet. It’s an important issue for investors as central bank liquidity has helped underpin markets during the Covid tumult.



During the last balance sheet unwind, from 2017 until 2019, the Fed allowed a capped level of proceeds from its bond portfolio to run off. The cap started at $10 billion each month, then increased by $10 billion quarterly until they reached $50 billion. By the time the Fed had to retreat, it had run off just $600 billion from what had been a $4.5 trillion balance sheet.



With the balance sheet now approaching $9 trillion — $8.3 trillion of which is comprised of the Treasurys and mortgage-backed securities the Fed has been buying — the initial view from Wall Street is that the Fed could be more aggressive this time.



<h2 class="wp-block-heading"><a></a>‘Uncharted waters’</h2>



Estimates bandied about following Wednesday’s news ranged from maximum caps of $100 billion from JPMorgan Chase to $60 billion at Nomura. Fed officials have not specified any numbers yet, with Kashkari earlier this week only saying that he sees the end of the runoff still leaving the Fed with a large balance sheet, probably bigger than before Covid.



One other possibility is that the Fed could sell assets outright, said Michael Pearce, senior U.S. economist at Capital Economics.



There would be multiple reasons for the central bank to do so, particularly with long-dated interest rates so low, the Fed’s bond profile being relatively long in duration and the sheer size of the balance sheet — almost twice what it was last time around.



<h3 class="wp-block-heading">Read more: <a href="https://www.cnbcafrica.com/2021/powell-says-fed-will-discuss-speeding-up-bond-buying-taper-at-december-meeting/">Powell says Fed will discuss speeding up bond-buying taper at December meeting</a></h3>



“While longer term yields have rebounded in recent days, if they were to remain stubbornly low and the Fed is faced with a rapidly flattening yield curve, we think there would be a good case that the Fed should supplement its balance sheet runoff with outright sales of longer-dated Treasury securities and MBS,” Pearce said in a note to clients.



That leaves investors with a multitude of possibilities that could make navigating the 2022 landscape difficult.



In that last tightening cycle, the Fed waited from the first hike before it started cutting the balance sheet. This time, policymakers seem determined to get things moving more quickly.



“Markets are concerned that we’ve never seen the Federal Reserve both lift interest rates off zero and reduce the size of its balance sheet at the same time. There was a two-year gap between those two events in the last cycle, so it is a valid concern. Our advice is to invest/trade very carefully the next few days,” DataTrek co-founder Nick Colas said in his daily note Wednesday evening. “We’re not predicting a meltdown, but we get why the market swooned [Wednesday]: these are truly uncharted waters.”

104138004-GettyImages-624164254

The Federal Reserve is scaring markets with the triple threat of policy tightening

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="740" height="416" src="https://cms.cnbcafrica.com/wp-content/uploads/2022/01/106991795-1640024759605-gettyimages-1360018821-dscf9586_20211220100037983.jpeg" alt="" class="wp-image-414420" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2022/01/106991795-1640024759605-gettyimages-1360018821-dscf9586_20211220100037983.jpeg 740w, https://cms.cnbcafrica.com/wp-content/uploads/2022/01/106991795-1640024759605-gettyimages-1360018821-dscf9586_20211220100037983-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2022/01/106991795-1640024759605-gettyimages-1360018821-dscf9586_20211220100037983-160x90.jpeg 160w" sizes="auto, (max-width: 740px) 100vw, 740px" /><figcaption>A trader works on the floor of the New York Stock Exchange (NYSE) at the start of trading on Monday following Friday’s steep decline in global stocks over fears of the new omicron Covid variant on December 20, 2021 in New York City. Spencer Platt | Getty Images</figcaption></figure>



LONDON — Global markets were on a bumpy ride on Thursday as persistent inflationary pressure and fears of a faster-than-expected rise in U.S. interest rates look set to weigh on riskier assets.



Shares in Asia-Pacific fell sharply on Thursday, following in the footsteps of the U.S. overnight. The tech-heavy Nasdaq dropped more than 3% to notch its biggest one-day loss since February, while the Dow Jones Industrial Average registered its first decline of 2022.



European stocks, meanwhile, are expected to open sharply lower later on Thursday, extending the global slump.



It comes at a time when market participants are already deeply concerned about the rapid global spread of the highly infectious omicron Covid variant, with several countries reporting record daily infections in the last 24 hours.



In Japan, the Nikkei 225 dipped almost 3% as the dash to get out of tech stocks continued to hit high-profile companies. Japan’s Sony Group was last seen trading down over 5.2%.



Australian stocks also saw heavy losses as the S&amp;P/ASX 200 fell 2.7%. In mainland China, the Shanghai composite declined 0.25% while the Shenzhen component slipped 0.1%.



<h3 class="wp-block-heading" id="h-read-more-powell-says-fed-will-discuss-speeding-up-bond-buying-taper-at-december-meeting">Read more: <a href="https://www.cnbcafrica.com/2021/powell-says-fed-will-discuss-speeding-up-bond-buying-taper-at-december-meeting/">Powell says Fed will discuss speeding up bond-buying taper at December meeting</a></h3>



MSCI’s broadest index of Asia-Pacific shares outside Japan traded 1.3% lower.



The losses come after minutes from the Federal Reserve’s key December meeting were released on Wednesday. The summary showed the central bank discussed reducing its balance sheet in another move to aggressively dial back its pandemic-era easy monetary policy.



The Fed’s plan to reduce the number of Treasurys and mortgage-backed securities it holds comes as it is already tapering its bond purchases and is set to hike interest rates after the taper concludes.



The 10-year U.S. Treasury yield topped 1.7% following the release of the minutes. On Thursday, it was trading at 1.7246% around 3 a.m. ET. Yields move inversely to prices.



Elsewhere, oil prices lost ground on Thursday morning. International benchmark Brent crude futures traded at $80.32 a barrel, around 0.6% lower, while U.S. West Texas Intermediate futures stood at $77.38, down almost 0.65%.



— CNBC’s Eustance Huang &amp; Jeff Cox contributed to this report.

106991795-1640024759605-gettyimages-1360018821-dscf9586_20211220100037983

Global markets slump on hawkish Fed minutes

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="740" height="416" src="https://cms.cnbcafrica.com/wp-content/uploads/2021/12/106981374-1638186197911-gettyimages-1351219008-a23i5581_2021110392306429.jpeg" alt="" class="wp-image-414256" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/12/106981374-1638186197911-gettyimages-1351219008-a23i5581_2021110392306429.jpeg 740w, https://cms.cnbcafrica.com/wp-content/uploads/2021/12/106981374-1638186197911-gettyimages-1351219008-a23i5581_2021110392306429-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2021/12/106981374-1638186197911-gettyimages-1351219008-a23i5581_2021110392306429-160x90.jpeg 160w" sizes="auto, (max-width: 740px) 100vw, 740px" /><figcaption>A truck passes pumpjacks in the Belridge oil field on November 03, 2021 near McKittrick, California. Mario Tama | Getty Images News | Getty Images</figcaption></figure>



Goldman Sachs predicts a new high in oil demand in 2022, and again in 2023.



Damien Courvalin, the investment bank’s head of energy research, also said Friday that oil at $100 per barrel was a possibility.



Oil demand was already at record levels before the latest omicron variant hit, and furthermore, demand for air travel should continue to recover, he said.



“We’ve already had record high demand before this newest variant, and you’re adding higher jet demand and the global economy is still growing,” Courvalin said in an energy outlook briefing with reporters on Friday. “You see how we will average a new record high in demand in 2022, and again, in 2023.”



Both international benchmark Brent crude and U.S. crude prices have spiked above $80 in recent months as post-pandemic demand outstrips supply. Surging natural gas prices have also caused crises around the world, most notably in Europe.



The omicron variant has dampened sentiment, however, pushing prices back to just above $70 in recent weeks.



Meanwhile, Courvalin expects restrictions that were hurting air travel to ease.



<h3 class="wp-block-heading">Read more: <a href="https://www.cnbcafrica.com/2021/u-s-asks-japan-china-others-to-consider-tapping-oil-reserves-sources-say/">U.S. asks Japan, China, others to consider tapping oil reserves, sources say</a></h3>



Air travel has been slow to recover, in part because of Asia, he said. “Until very recently, countries like Australia, New Zealand Singapore, were very aggressive on limiting international transfer. That’s easing,” he said.



“We’ll have to wait for this wave to pass but that suggests that international travel should recover further next year,” he said, predicting that oil prices will be at $85 per barrel for 2022, with an upside risk that prices could go $5 to $10 higher.



<h2 class="wp-block-heading" id="h-oil-at-110"><a></a>Oil at $110?</h2>



Courvalin said he would not rule out the possibility of oil prices hitting $100, and there are “two paths” that could lead to that.



The first is that costs go up as oil companies ramp up production. “There’s inflation, everywhere else in the economy, and eventually there’s inflation in oil services,” he said.



The other possibility is if the supply of oil can’t meet the demand as global economies reopen from the pandemic.



Courvalin said oil prices could go as high as $110 as demand destruction occurs to slow the market. That’s “quite conceivable,” he added.



There had already been concerns over high oil prices sending the market toward demand destruction, which occurs when demand plunges during a brief period of time, caused by a sustained period of high prices.



OPEC+ — which is made up of Organization of the Petroleum Exporting Countries, and its allies including Russia — have said they could meet earlier than their planned Jan. 4 meeting if changes in the demand outlook warrant a review, Reuters reported. OPEC+ has plans to add another 400,000 barrels per day of supply in January, according to Reuters.

106981374-1638186197911-gettyimages-1351219008-a23i5581_2021110392306429

Goldman says oil could hit $100, demand might reach ‘new record high’ in the next two years

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="740" height="416" src="https://cms.cnbcafrica.com/wp-content/uploads/2021/12/106982681-1638338428100-gettyimages-1233249991-BRAZIL_COFFEE.jpeg" alt="" class="wp-image-414244" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/12/106982681-1638338428100-gettyimages-1233249991-BRAZIL_COFFEE.jpeg 740w, https://cms.cnbcafrica.com/wp-content/uploads/2021/12/106982681-1638338428100-gettyimages-1233249991-BRAZIL_COFFEE-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2021/12/106982681-1638338428100-gettyimages-1233249991-BRAZIL_COFFEE-160x90.jpeg 160w" sizes="auto, (max-width: 740px) 100vw, 740px" /><figcaption>A worker separates coffee cherries during a harvest on a farm in Guaxupe, located in the southwest of the state of Minas Gerais in Brazil, on Wednesday, June 2, 2021. Bloomberg | Bloomberg | Getty Images</figcaption></figure>



Coffee is one of the most widely consumed beverages in the world — but the surge in demand is threatening the planet, prompting environmentalists and scientists to look for sustainable ways to produce coffee.



“Most coffee goes through a wet-milling process that uses significant amounts of freshwater to de-pulp and wash the coffee. Then the coffee is dried, roasted, shipped and brewed — each of which uses energy,” said Bambi Semroc, senior vice president of the Center for Sustainable Lands and Waters at Conservation International.



In the last 30 years, growing demand for coffee has led to a 60% increase in production, according to the&nbsp;International Coffee Organization.



From deforestation to a high usage of water and energy resources, research shows that increased coffee production is destroying the planet.



Brazil, the world’s largest coffee producer, saw deforestation of its&nbsp;Amazon rainforest reach a 15-year high, according to a report published by Brazil’s National Institute for Space Research.



<h3 class="wp-block-heading">Read more: <a href="https://www.cnbcafrica.com/2021/coffee-prices-are-at-10-year-highs-and-analysts-say-they-have-much-further-to-go/">Coffee prices are at 10-year highs, and analysts say they have much further to go</a></h3>



An estimated 13,235 square kilometers&nbsp; — equivalent to 2,429 football fields — was lost between August 2020 and July 2021, representing&nbsp;a 22% increase from the previous year.



Coffee production also leaves a large water and energy footprint, with 140 liters of water needed to produce just 125 millimeters of coffee, according to the&nbsp;Water Footprint Network.



But at the same time, the coffee industry is also vulnerable to climate change.



Just this year, Brazil experienced waves of frost and drought in June, which pushed Arabica coffee prices to hit a seven-year high.



Commodity experts predict that prices will continue to rise “given the current instability of global markets as well as uncertainties around next year’s outputs of dominant coffee producers — Brazil, Vietnam, and Colombia,” said Semroc, from the Center for Sustainable Lands and Waters at Conservation International.



<h2 class="wp-block-heading" id="h-lab-grown-coffee-anyone"><a></a>Lab-grown coffee, anyone?</h2>



Scientists in Finland are trying to come up with a sustainable, lab-grown alternative for the next cup of coffee — but the technology for producing it is still very costly.



The&nbsp;VTT Technical Research Centre of Finland&nbsp;successfully produced coffee cells in a bioreactor through cellular agriculture, in a bid to make coffee production more environmentally friendly.



The research center’s lab-grown coffee eliminates the need for deforestation and the process has a much lower water footprint as scientists are able to use recycled water to generate their bioreactors.



Another advantage is that coffee can be produced at all times under controlled temperature, light and oxygen conditions, removing the supply volatility in the industry.



“We’re not a coffee producer but would want to collaborate and work with parties that have the expertise and vision to bring something like this to the market,” said Heiko Rischer, head of plant biotechnology at the research institute.



“It also requires significant investment because the whole approval process&#8230; doesn’t only need time, but it’s of course also a costly exercise,” he added.



The innovation also removes the long transportation process of coffee from the country of origin to the consumer country, and “has an impact on traceability and transparency of the process&#8230; this is often also a big problem in the coffee supply chain,” Rischer said.



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="740" height="416" src="https://cms.cnbcafrica.com/wp-content/uploads/2021/12/106982690-1638340795830-Coffee-produced-in-bioreactor-through-cellular-agriculture-3.jpg" alt="" class="wp-image-414245" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/12/106982690-1638340795830-Coffee-produced-in-bioreactor-through-cellular-agriculture-3.jpg 740w, https://cms.cnbcafrica.com/wp-content/uploads/2021/12/106982690-1638340795830-Coffee-produced-in-bioreactor-through-cellular-agriculture-3-300x169.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2021/12/106982690-1638340795830-Coffee-produced-in-bioreactor-through-cellular-agriculture-3-160x90.jpg 160w" sizes="auto, (max-width: 740px) 100vw, 740px" /><figcaption>Coffee cell cultures (right) and roasted coffee produced by VTT’s cellular agriculture method. VTT Technical Research Centre of Finland</figcaption></figure>



“We are not working with coffee beans as a starting material, but instead with a freeze dried powder that we produce in the lab,” he told CNBC.



Once the powder is roasted, it can be brewed the same way as a conventional cup of coffee.



Although Heiko forecasted it could take a minimum of four years before VTT’s lab-grown coffee receives regulatory approval, there has already been a strong interest surrounding the product in Finland, the world’s largest coffee consumer.



“In the past, we used to see a big resistance against genetically modified food, so we were positively surprised when people showed an interest to buy and taste the product&#8230; Coffee is a luxury product and people want to be able to purchase it with a good conscience,” Heiko said.



<h2 class="wp-block-heading"><a></a>Lack of investments</h2>



Programs such as those by World Coffee Research and Conservation International also aim to help meet growing global demand for coffee by increasing production of small-scale farmers and improving increasing investments on existing farms.



“Coffee research is a distant priority when you have more pressing humanitarian priorities &#8230; Many low-income countries are responsible for delivering coffee to the world but haven’t been able to invest in ways that would enable their farmers to reduce risks,” said Jennifer Long, CEO of World Coffee Research.



More than 100 world leaders at Cop26, the United Nations global climate summit, pledged in November to collectively&nbsp;end deforestation by 2030. They are also seeking to redesign agricultural policies to incentivize sustainable farming.



However, a lack of investment in agricultural research and development could lead to more volatile prices ahead, experts warned.



<h3 class="wp-block-heading">Read more: <a href="https://www.cnbcafrica.com/2021/ivory-coast-boosts-local-firms-share-in-cocoa-exports-by-decree/">Côte d’Ivoire boosts local firms’ share in cocoa exports by decree</a></h3>



Coffee production makes up a large share of export revenues for many developing countries — if investments in research and innovation are not made, “the consequence of the volatility in the coffee market can be very pronounced for farmers,” she added.



Of the 12.5 million smallholder coffee farmers, at least 5.5 million people live below the international poverty line of $3.20 a day, according to&nbsp;Enveritas, a non-profit that helps small-scale coffee farmers find sustainable solutions.



“Investments in agricultural development, with a focused dedication to agricultural research and technology, are the most important singular investments you can make,” said Long, pointing out that agricultural-specific challenges often leave small-scale farmers vulnerable.



Agricultural investments are important to ensure food security goals can be achieved despite global challenges impeding production today, Long said.



“Trees are a wonderful place to start because they absorb and hold so much carbon,” she added, implying that agricultural production systems need to be modified to integrate more trees through agroforestry.

106982681-1638338428100-gettyimages-1233249991-BRAZIL_COFFEE

Coffee production hurts the planet. Scientists think they may have another way

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="740" height="416" src="https://cms.cnbcafrica.com/wp-content/uploads/2021/12/106988833-1639463514573-gettyimages-1236289761-JAPAN_TOYOTA.jpeg" alt="" class="wp-image-414212" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/12/106988833-1639463514573-gettyimages-1236289761-JAPAN_TOYOTA.jpeg 740w, https://cms.cnbcafrica.com/wp-content/uploads/2021/12/106988833-1639463514573-gettyimages-1236289761-JAPAN_TOYOTA-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2021/12/106988833-1639463514573-gettyimages-1236289761-JAPAN_TOYOTA-160x90.jpeg 160w" sizes="auto, (max-width: 740px) 100vw, 740px" /><figcaption>The Toyota Motor Corp. logo in the Toyota City Showcase exhibit at the company’s Mega Web car theme park in Tokyo, Japan, on Monday, Nov. 1, 2021. Kiyoshi Ota | Bloomberg | Getty Images</figcaption></figure>



Toyota, one of the world’s largest automakers, is planning to invest 4 trillion yen ($35 billion) to build a full lineup of 30 battery-powered electric vehicles by 2030.



It aims to also increase global sales of battery electric vehicles by 3.5 million units a year by the end of the decade, CEO Akio Toyoda said Tuesday.



Most of Toyota’s current electric vehicle sales are hybrid electric cars that are powered by a combination of an internal combustion engine and battery-operated electric motors. Battery-only EVs make up only a fraction of its current sales.



The Japanese automaker will increase new investments into battery technologies by 500 billion yen ($4.4 billion) to 2 trillion yen, according to Toyoda. It will be part of Toyota’s broader 4 trillion yen investment into battery electric vehicles and would include both capital expenditure as well as research and development.



Toyota also plans to invest another 4 trillion yen in other types of electric vehicles, including hybrid cars, plug-in hybrids and fuel-cell electric vehicles, which use hydrogen as a power source.



“In this diversified and unchartered era, it is important to flexibly change the types and quantities of products produced, while keeping an eye on the market trends,” Toyoda said during a briefing on the carmaker’s battery electric vehicle strategies, according to official translations of his remarks in Japanese.



“We believe that quickly adapting to changes in the future is more important than trying to predict the future, which is nothing but uncertain. We want to keep options available for our customers until the right path is known,” he added.



Read more: 



For its luxury brand Lexus, Toyota aims to have battery electric vehicles account for 100% of vehicle sales in Europe, North America, and China by 2030 and globally by 2035.



Despite being one of the pioneers of hybrid models, Toyota has been relatively slow in its push toward battery-only electric vehicles compared to some of its global competitors like General Motors and Ford.



Last month, at the U.N. climate conference in Scotland, the Japanese automaker declined to join a group of six major carmakers, including Sweden’s Volvo and Daimler’s Mercedes-Benz, to sign a declaration to phase out fossil-fuel cars by 2040, Reuters reported.



A top Toyota executive had reportedly told the news agency that the company does not want to be seen as an electric vehicle maker, but wants to be viewed as a carbon-neutral business instead.



Toyota is aiming for carbon-neutrality at manufacturing plants by 2035, Toyoda said at Tuesday’s briefing.



Rival Nissan last month said it will invest 2 trillion yen (around $17.6 billion) over the next five years to speed up the electrification of its product line. It plans to roll out 23 new electrified models by 2030, 15 of which will be fully electric.

106988833-1639463514573-gettyimages-1236289761-JAPAN_TOYOTA

Toyota to invest $35 billion into battery-powered EVs and roll out 30 models by 2030

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="740" height="416" src="https://cms.cnbcafrica.com/wp-content/uploads/2021/12/106799600-1605802328453-gettyimages-1229598259-AFP_8V48AQ.jpeg" alt="" class="wp-image-414169" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/12/106799600-1605802328453-gettyimages-1229598259-AFP_8V48AQ.jpeg 740w, https://cms.cnbcafrica.com/wp-content/uploads/2021/12/106799600-1605802328453-gettyimages-1229598259-AFP_8V48AQ-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2021/12/106799600-1605802328453-gettyimages-1229598259-AFP_8V48AQ-160x90.jpeg 160w" sizes="auto, (max-width: 740px) 100vw, 740px" /><figcaption>A gamer plays on Sony’s Playstation 5 console at his home in Seoul. Yelim Lee | AFP via Getty Images</figcaption></figure>



The&nbsp;global chip shortage&nbsp;has been rumbling on all year and still hasn’t gone away.



But what does that mean for Christmas? Will some presents be harder to get hold of or more expensive?



That depends on what you’re after and how late you leave your Christmas shopping.



Semiconductors are beneath the hood of an increasing number of products — from cars and e-bikes to washing machines and toothbrushes. Many of these chips are in short supply as the Covid pandemic has led to supply chain bottlenecks and increased demand.



Alan Priestley, a semiconductor analyst at research firm Gartner, told CNBC that the chip shortage is bound to have some impact on Christmas.



“We may find that some things that have been readily available in the past may not be readily available now,” he said, adding that instant gratification can no longer be found from the usual shopping services. “We’re all used to Amazon Prime: hit the button, it’s there in 24 hours. Maybe now you’ve got to wait two or three weeks.”



Many of today’s electronic products contain a large number of chips.



“The issue we face is things made with chips don’t just use one chip,” Priestley said. “New smartphones have got many, many power control chips and it’s those chips that are in short supply.”



<h3 class="wp-block-heading">Read more: <a href="https://www.cnbcafrica.com/2021/asian-and-european-countries-alarmed-by-new-covid-variant-tighten-curbs/">Asian and European countries, alarmed by new COVID variant, tighten curbs</a></h3>



TSMC,&nbsp;Samsung&nbsp;and&nbsp;Intel, the heavyweights of the semiconductor industry, aren’t focused on making these older, less advanced power management chips because they can make more by selling more innovative versions.



Semiconductor-rich products like computers, smartphones and games consoles are likely to be popular Christmas presents, but there are availability problems, according to Glenn O’Donnell, VP and research director at analyst firm Forrester.



Sony’s&nbsp;PS5 and&nbsp;Microsoft’s&nbsp;Xbox Series S are widely unavailable, for example, as is&nbsp;Google’s&nbsp;Pixel 6 Pro smartphone.



“If you can get them, you’re paying a high premium,” O’Donnell told CNBC.



“I believe the supply issues including but not limited to semiconductors will cause a lot of trouble this season,” he added. “If you don’t already have what you want to put under the tree, you may be out of luck. Even Santa himself won’t be able to deliver.”



Berlin-based Jack de Santis, CEO of repair service Rebel Technology Labs, told CNBC that he’s looked “everywhere” for a Google Pixel 6 Pro — but to no avail. He’s unsure if he will stick with his old phone or get the regular Pixel 6, which is still available in a few places. “Both options are compromises I’m not happy with,” he said.



<h2 class="wp-block-heading" id="h-battling-the-bots"><a></a>Battling the bots</h2>



It’s not just other shoppers that consumers are competing with for in demand items this Christmas. Some people are using automated bots to snap up popular items as soon as they become available online at face value.



“The bots buy up high-demand products to corner the market so they can then sell these at inflated prices,” O’Donnell said.



There are countless examples of PS5s and Xbox Series S consoles being sold on&nbsp;eBay,&nbsp;Facebook&nbsp;Marketplace, Gumtree and other buy-and-sell platforms for considerably more than the recommended retail price.



<h2 class="wp-block-heading" id="h-don-t-hesitate-and-be-flexible"><a></a>Don’t hesitate and be flexible</h2>



Shoppers should consider buying desired electronics that are in stock and available sooner rather than later, Priestley warned.



“If it’s there and available, make the purchase,” he said. “The issue is the supply lines are extended. As the goods that are in current supply get consumed, it’s going to take longer to replace them.”



Consumers who are able to be flexible with certain purchases may also have more luck. PCs, for example, come in lots of different configurations and the central processing unit (CPU) is often changeable.



“It may well be that the your desired configuration is not available, but a different configuration is available,” Priestley said. “Consider alternatives.”

106799600-1605802328453-gettyimages-1229598259-AFP_8V48AQ

‘Even Santa himself won’t be able to deliver’: How the global chip shortage could dampen Christmas

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="740" height="416" src="https://cms.cnbcafrica.com/wp-content/uploads/2021/12/106986908-1639038636884-gettyimages-1237108690-20090101211209-99-311444.jpeg" alt="" class="wp-image-414081" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/12/106986908-1639038636884-gettyimages-1237108690-20090101211209-99-311444.jpeg 740w, https://cms.cnbcafrica.com/wp-content/uploads/2021/12/106986908-1639038636884-gettyimages-1237108690-20090101211209-99-311444-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2021/12/106986908-1639038636884-gettyimages-1237108690-20090101211209-99-311444-160x90.jpeg 160w" sizes="auto, (max-width: 740px) 100vw, 740px" /><figcaption>Cigarettes lying on a table. Sven Hoppe | picture alliance via Getty Images</figcaption></figure>



New Zealand on Thursday announced plans to prevent young people from ever being able to buy cigarettes as part of an initiative to make the country entirely smoke-free by 2025.



The measures will mean that anyone born after 2008 will not be able to purchase cigarettes or tobacco products in their lifetime, while the level of nicotine in cigarettes available to older people will be reduced.



The number of retailers able to sell cigarettes could also be cut substantially, officials said. The legislation is expected to be enacted next year.



Health officials and campaign groups have welcomed the move, recognizing the proposed reforms as one of the world’s toughest crackdowns on the tobacco industry.



<h3 class="wp-block-heading">Read more: <a href="https://www.cnbcafrica.com/2021/imf-chief-says-omicron-could-dent-global-economic-growth/">IMF chief says Omicron could dent global economic growth</a></h3>



New Zealand already requires plain packaging and has high taxes on cigarettes, but the health ministry says more action is required if it is to reach the goal of making the country smoke-free.



“This is a historic day for the health of our people,” Dr. Ayesha Verrall, associate health minister, said in a statement.



“We want to make sure young people never start smoking so we will make it an offense to sell or supply smoked tobacco products to new cohorts of youth. People aged 14 when the law comes into effect will never be able to legally purchase tobacco.”



Verrall said smoking is the leading cause of preventable death in New Zealand and causes one in four cancers in its population of roughly 5 million. The health ministry said smoking-related harm was particularly prevalent in Maori, Pacific and low-income communities.



<h2 class="wp-block-heading" id="h-a-long-slog"><a></a>‘A long slog’</h2>



The government’s smoke-free goal, first introduced in 2011, is to ensure that the national smoking rate is reduced to less than 5% by 2025 — before eventually eliminating smoking altogether. At present, around 13% of adults smoke nationwide, down from 18% almost a decade ago.



However, the current smoking rate among the indigenous Maori population stands at 31%, much higher than the national average.



“It’s been a long slog, but it actually now looks like we will achieve the Smokefree 2025 goal,” said Robert Beaglehole, chairman and founder of the campaign group, ASH.



<h3 class="wp-block-heading">Read more: <a href="IMF: Poor nations could face ‘economic collapse’ unless G20 extends debt relief">IMF: Poor nations could face ‘economic collapse’ unless G20 extends debt relief</a></h3>



“This collection of complementary measures will be the envy of countries struggling to combat the death and misery caused by smoked tobacco. We will lead the world in tobacco control,” he added.



The World Health Organization describes the tobacco epidemic as “one of the biggest public health threats the world has ever faced.” It says smoking, including second-hand, kills more than 8 million people per year.



More than 80% of the world’s estimated 1.3 billion tobacco users live in low- and middle-income countries, where the burden of tobacco-related illness and death is heaviest.

106986908-1639038636884-gettyimages-1237108690-20090101211209-99-311444

New Zealand to ban young people from ever being able to buy cigarettes

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="615" src="https://cms.cnbcafrica.com/wp-content/uploads/2021/12/56HHVKWINZOFND6QDCR6OVOAWQ-820x615.jpg" alt="" class="wp-image-413947" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/12/56HHVKWINZOFND6QDCR6OVOAWQ-820x615.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2021/12/56HHVKWINZOFND6QDCR6OVOAWQ-300x225.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2021/12/56HHVKWINZOFND6QDCR6OVOAWQ-120x90.jpg 120w, https://cms.cnbcafrica.com/wp-content/uploads/2021/12/56HHVKWINZOFND6QDCR6OVOAWQ-768x576.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2021/12/56HHVKWINZOFND6QDCR6OVOAWQ.jpg 960w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption>A logo of cloud service provider Oracle is seen at the company&#8217;s offices at Eastpoint Business Park, Dublin, Ireland October 18, 2021. Picture taken October 18, 2021. REUTERS/Tom Bergin</figcaption></figure>



DUBLIN, Dec 3 (Reuters) – Leaders of the world&#8217;s largest economies hailed a recent agreement to overhaul global corporate tax rules as key ensuring multinationals paid their fair share of tax.



The October deal established a <a href="https://www.reuters.com/business/finance/what-is-global-minimum-tax-deal-what-will-it-mean-2021-10-08">global minimum corporate tax rate of 15%</a> aimed at curtailing profit-shifting to lower-tax jurisdictions such as Ireland, where many large international firms have their European headquarters. It will eliminate incentives to shift jobs and profits abroad, U.S. President Joe Biden in early October.



But some companies could still use Ireland to reduce their tax bills even after the agreement takes effect, according to tax specialists and a Reuters review of corporate filings.



That&#8217;s because the new agreement won&#8217;t stop companies benefiting from a strategy widely implemented in recent years that reduces taxes over a period of up to a decade or more. Ireland&#8217;s relatively generous tax allowances permit multinationals with a presence in the country to sell intellectual property, such as patents and brands, from one subsidiary to another to generate deductions that can be used to shield future profits from tax.



Companies that have generated deductions to reduce their taxable income by more than $10 billion each in recent years via this tax-minimizing strategy include U.S. technology companies Adobe Inc and Oracle Corp, corporate filings show.



Business-software provider Oracle declined to comment and Adobe, creator of software such as Acrobat pdf-maker, didn&#8217;t respond to requests for comment. Both companies have said they conform to relevant tax laws.



The agreement, brokered by the Organisation for Economic Co-operation and Development (OECD), is due to take effect in 2023. <a href="https://www.reuters.com/business/ireland-backs-global-tax-deal-gives-up-prized-125-rate-2021-10-07">It was signed by more than 130 jurisdictions, including Ireland</a>.



The Irish finance ministry said Ireland&#8217;s tax treatment of intellectual property transactions is in line with other OECD countries.



In response to Reuters™ questions, the OECD acknowledged that companies could continue to benefit from profit-shifting strategies already in place but that it expects companies to be unable to build up such tax shields in the future. The approach typically relies on a company also having a subsidiary in a country with a corporate income-tax rate of zero, such as Bermuda, that enables the company to conduct the sale tax free. By phasing out zero-tax jurisdictions for multinationals, the OECD expects the global minimum tax of 15% will make the strategy no longer attractive.



&#8220;We&#8217;re trying to design rules for the future,&#8221; said John Peterson, an OECD official.



Peterson added that the OECD can&#8217;t be certain how each country&#8217;s rules would interact with the global minimum tax. But he said the OECD is confident that abuses will be limited by a requirement that countries calculate taxable income in accordance with accounting rules.



Tax specialists say the deal&#8217;s impact remains unclear because key details are yet to be agreed, including how to calculate the pot of profit that is to be taxed. Countries are currently debating carve-outs for certain tax breaks. In addition, jurisdictions could retain wide latitude in how they allow companies to calculate taxable income, the specialists said.



&#8220;Where there isn&#8217;t accounting consistency, there is scope for gaming,&#8221; said Nicholas Gardner, a tax partner at law firm Ashurst in London.



The new rules are expected to be finalized next year and require lawmaker approval in some jurisdictions. That includes the United States, where several top Republican politicians have voiced opposition to the deal.



Malta is another country that permits multinationals to minimize taxes via intra-company intellectual property sales. Malta&#8217;s finance ministry did not respond to requests for comment on its intellectual property-related tax allowances.



<h2 class="wp-block-heading" id="h-tax-shield">TAX SHIELD</h2>



International pressure forced Ireland in recent years to phase out one of the world&#8217;s best-known corporate-tax loopholes, known as the double Irish. In response, companies have increasingly accumulated tax deductions known as capital allowances via intra-group sales of intellectual property, according to tax advisors, economists and company filings.



Since 2015, multinationals have moved hundreds of billions of euros worth of intellectual property into Ireland, economists say. This has led to vast annual tax deductions for foreign companies related to so-called intangible assets more than 45 billion euros in 2019 up from under 2.7 billion euros in 2014, according to data from Ireland&#8217;s tax authority. The data doesn&#8217;t break down what portion of those deductions were related to intellectual-property transactions within a corporation.



Virtually every multinational has moved intellectual property, said Christopher Sibley, a senior statistician at Ireland&#8217;s Central Statistics Office.



The profits being shielded from tax by U.S.-based companies typically come from sales to Europe, Asia and Africa, according to tax specialists and corporate filings. The U.S. Treasury loses out because the products and services sold are based on research conducted and investment made in the United States, academics say.



The U.S. Treasury declined to comment on whether U.S. companies will continue to take advantage of pre-existing tax strategies or benefit from future ones.



Adobe books most of its sales to non-U.S. clients through an Irish subsidiary based in a four-storey block in an office park outside Dublin, corporate filings show.



In 2020, Adobe Systems Software Ireland Ltd purchased intellectual property from another subsidiary that was both an Irish-registered company and a resident in Bermuda for tax purposes. The set-up meant no tax was due on the $11 billion profit from the sale. Meanwhile, Irish-tax resident Adobe Systems Software Ireland registered an $11 billion expense that could be used to offset taxes on profits over a period of about eight years because it is an asset that depreciates over time, according to the subsidiaries accounts.



Adobe paid $197 million of tax on $3.1 billion of reported profit in Ireland in 2020 and sales of $5.6 billion, according to accounts for its main Irish unit. This equates to an effective tax rate of about half of Ireland&#8217;s current statutory 12.5% corporate income tax rate, thanks to the impact of the capital allowances.



Other U.S. companies that have amassed multi-billion-dollar tax deductions from intellectual property sales to affiliates over the last three years include semiconductor maker Analog Devices Inc, medical devices maker Stryker Corp and software group Cadence Design Systems Inc, publicly available accounts for their Irish subsidiaries show.



Analog Devices and Stryker said they adhere to tax rules and regulations but declined to answer questions on their specific tax arrangements. Cadence declined to comment.



(Reporting Tom Bergin; Editing by Cassell Bryan-Low and Rachel Armstrong)

56HHVKWINZOFND6QDCR6OVOAWQ

Global tax deal leaves billion-dollar loopholes, REUTERS Analysis finds

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2021/08/GettyImages-1233035258-820x547.jpg" alt="" class="wp-image-411043" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/08/GettyImages-1233035258-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2021/08/GettyImages-1233035258-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2021/08/GettyImages-1233035258-120x80.jpg 120w, https://cms.cnbcafrica.com/wp-content/uploads/2021/08/GettyImages-1233035258-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2021/08/GettyImages-1233035258-1536x1024.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2021/08/GettyImages-1233035258-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption>UKRAINE &#8211; 2021/05/21: In this photo illustration the International Monetary Fund (IMF) logo is seen on a smartphone screen. (Photo Illustration by Pavlo Gonchar/SOPA Images/LightRocket via Getty Images)</figcaption></figure>



LONDON, Dec 2 (Reuters) &#8211; Poorer nations could be facing economic collapse unless the world&#8217;s richest economies agree to step up debt relief efforts, International Monetary Fund (IMF) chief Kristalina Georgieva warned on Thursday.



Some 60% of low income countries are already in or at high risk of debt distress, compared to less than half that in 2015, Georgieva wrote in a blog co-authored with Ceyla Pazarbasioglu, director at the IMF Strategy, Policy and Review Department.



&#8220;For many of these countries, the challenges are mounting,&#8221; Georgieva and Pazarbasioglu warned.



&#8220;We may see economic collapse in some countries unless G20 creditors agree to accelerate debt restructurings and suspend debt service while the restructurings are being negotiated.&#8221;



The G20 group of major economies launched the Debt Service Suspension Initiative (DSSI) in spring 2020, designed to offer a temporary freeze in payments to low-income countries, many of which had already faced hefty debt burdens pre-pandemic. However, that initiative is running out at the end of the year.



<h3 class="wp-block-heading" id="h-read-more-imf-chief-georgieva-says-very-optimistic-about-reaching-loan-deal-with-zambia">Read more: <a href="https://www.cnbcafrica.com/2021/imf-chief-georgieva-says-very-optimistic-about-reaching-loan-deal-with-zambia/">IMF chief Georgieva says ‘very optimistic’ about reaching loan deal with Zambia</a></h3>



Progress on another G20 plan, the Common Framework for Debt Treatments designed to reduce the overall debt burdens of poor countries, has been very slow.



&#8220;Recent experiences of Chad, Ethiopia, and Zambia show that the Common Framework for debt treatments beyond the DSSI must be improved,&#8221; the authors wrote, acknowledging that the Common Framework had yet to deliver on its promise.



The reasons for this were manifold &#8211; coordinating Paris Club and other creditors, as well as multiple government institutions and agencies within creditor countries slowed down decision making. In Chad&#8217;s case, having to restructure a large, collateralized obligation held by a private company and partly syndicated to a large number of banks and funds complicated progress.



&#8220;It is also critical that private sector creditors implement debt relief on comparable terms,&#8221; the authors wrote.



Meanwhile major central banks like the Federal Reserve preparing to unwind easy money policies could spell more trouble.



&#8220;No doubt 2022 will be much more challenging with the tightening of international financial conditions on the horizon.&#8221;



(Reporting by Karin Strohecker Editing by Alistair Bell)

In this photo illustration the International Monetary Fund (

IMF: Poor nations could face ‘economic collapse’ unless G20 extends debt relief

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="565" src="https://cms.cnbcafrica.com/wp-content/uploads/2021/12/VJHZKZFBZBOVDNMDYGVWH62F4I-820x565.jpg" alt="" class="wp-image-413926" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/12/VJHZKZFBZBOVDNMDYGVWH62F4I-820x565.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2021/12/VJHZKZFBZBOVDNMDYGVWH62F4I-300x207.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2021/12/VJHZKZFBZBOVDNMDYGVWH62F4I-131x90.jpg 131w, https://cms.cnbcafrica.com/wp-content/uploads/2021/12/VJHZKZFBZBOVDNMDYGVWH62F4I-768x530.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2021/12/VJHZKZFBZBOVDNMDYGVWH62F4I.jpg 960w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption>Officials prepare to disinfect the premises of Tribhuvan International Airport after it reopened with limited international flights allowed to operate amid the spread of the coronavirus disease (COVID-19) in Kathmandu, Nepal September 2, 2020. REUTERS/Navesh Chitrakar/file photo</figcaption></figure>



KATHMANDU, Dec 3 (Reuters) &#8211; Nepal will ban the entry of travellers who have been in eight African countries or Hong Kong, to curb the spread of the new Omicron coronavirus variant, a government spokesman said on Friday.



The ban, which goes into effect at midnight on Friday, covers people who have been in or transiting through South Africa, Botswana, Zimbabwe, Namibia, Lesotho, Eswatini, Mozambique, Malawi and Hong Kong.



Travellers who have been to these countries in the past three weeks will also not be allowed to enter Nepal, and all other international visitors already in transit must spend seven days at their own cost in hotel quarantine, the government said in a statement.



&#8220;Nepali nationals are advised against non-essential foreign travel for fear of the new variant,&#8221; Home Ministry spokesman Phanindra Pokharel told Reuters.



Government employees and delegates to international conferences must obtain prior permission for their visits.



The variant &#8211; identified first in South Africa, but also detected in Europe, Asia and the United States &#8211; is potentially more contagious than previous variants, although experts do not know yet if it will cause more or less severe COVID-19 compared to other strains. 



This is a developing story&#8230;



(Reporting by Gopal Sharma; Editing by Christopher Cushing)

VJHZKZFBZBOVDNMDYGVWH62F4I

Nepal to ban arrivals from 8 African countries, Hong Kong over Omicron fears

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="740" height="416" src="https://cms.cnbcafrica.com/wp-content/uploads/2021/12/104226861-GettyImages-631902232.jpg" alt="" class="wp-image-413916" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/12/104226861-GettyImages-631902232.jpg 740w, https://cms.cnbcafrica.com/wp-content/uploads/2021/12/104226861-GettyImages-631902232-300x169.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2021/12/104226861-GettyImages-631902232-160x90.jpg 160w" sizes="auto, (max-width: 740px) 100vw, 740px" /><figcaption>The financial offices of banks in the financial district of Canary Wharf, are pictured from Greenwich Park in London on January 17, 2017. Ben Stansall | AFP | Getty Images</figcaption></figure>



The European Commission has fined five banks for participating in an illegal foreign exchange trading cartel.



UBS, Barclays, RBS, HSBC and Credit Suisse were fined a combined total of 344 million euros ($390 million), the commission said in a statement Thursday.



The investigation, focused on the trading of G-10 currencies, revealed that foreign exchange traders in these five banks discussed sensitive information and trading plans. They occasionally coordinated their trading plans via a professional online chatroom called Sterling Lads, the commission said.



Four of the banks’ fines — UBS, Barclays, RBS and HSBC — were discounted by 10% as they acknowledged their participation in the cartel.



Credit Suisse did not benefit from this reduction as it did not cooperate with authorities, the commission said. Its fine was reduced by 4% to reflect that the bank was not liable for all aspects of the case, however.



<h3 class="wp-block-heading" id="h-read-more-moves-deutsche-bank-hires-five-senior-wealth-managers-from-ubs">Read more: <a href="https://www.cnbcafrica.com/2021/moves-deutsche-bank-hires-five-senior-wealth-managers-from-ubs/">MOVES-Deutsche Bank hires five senior wealth managers from UBS</a></h3>



UBS ultimately does not have to pay any fine as the bank received “full immunity” for revealing the existence of the cartel.



“Our cartel decisions to fine UBS, Barclays, RBS, HSBC and Credit Suisse send a clear message that the Commission remains committed to ensure a&nbsp;sound and competitive financial sector that is essential for investment and growth,” Margrethe Vestager, Europe’s competition chief, said in a statement.



UBS and Barclays were not immediately available when contacted by CNBC Thursday. Credit Suisse and HSBC declined to comment.



A spokesperson for NatWest,&nbsp;the parent company of&nbsp;RBS, told CNBC via email: “We are pleased to have reached this settlement regarding serious misconduct that took place in a single chatroom, and that involved a former employee of the bank, around a decade ago.”

104226861-GettyImages-631902232

Barclays, RBS, HSBC, Credit Suisse and UBS fined for taking part in forex trading cartel

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="740" height="416" src="https://cms.cnbcafrica.com/wp-content/uploads/2021/12/106983366-1638431182463-gettyimages-1227724940-aq5i2313.jpeg" alt="" class="wp-image-413912" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/12/106983366-1638431182463-gettyimages-1227724940-aq5i2313.jpeg 740w, https://cms.cnbcafrica.com/wp-content/uploads/2021/12/106983366-1638431182463-gettyimages-1227724940-aq5i2313-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2021/12/106983366-1638431182463-gettyimages-1227724940-aq5i2313-160x90.jpeg 160w" sizes="auto, (max-width: 740px) 100vw, 740px" /><figcaption>Doctor wearing PPE looks on before a house-to-house coronavirus testing drive on July 21, 2020 in Lima, Peru. Raul Sifuentes | Getty Images News | Getty Images</figcaption></figure>



LONDON — As more cases of the new omicron Covid variant emerge around the world, experts say it’s likely that the variant, first identified in South Africa last week, had already been circulating for some time.



The World Health Organization said on Wednesday that at least 23 countries from five of the six WHO regions have now reported cases of omicron, “and we expect that number to grow.”



The U.S. then became the 24th country to confirm its first case of omicron. It was detected in a&nbsp;fully vaccinated person in North Carolina, the Centers for Disease Control and Prevention confirmed on Wednesday.



Other countries that have&nbsp;identified&nbsp;the variant the&nbsp;U.K., France, Israel,&nbsp;Belgium,&nbsp;the Netherlands,&nbsp;Germany, Italy, Sweden, Denmark, Australia, Canada, Hong Kong and a number of countries in southern Africa.



The U.S., U.K. and EU, among others, responded to news of the variant last week by temporarily suspending flights from southern African countries, or introducing strict quarantines on anyone arriving from the region.



The move sparked anger in South Africa and has prompted criticism from the WHO, which said on Wednesday that such reactions could deter countries which sequence and report virus variants (like the U.K. and South Africa, where major Covid variants have been found) from being transparent in future.



<h2 class="wp-block-heading" id="h-omicron-circulating-for-a-while"><a></a>Omicron circulating for a while?</h2>



The omicron variant, or B.1.1.529 as it’s formally known,&nbsp;was first reported to the WHO from&nbsp;South Africa&nbsp;on&nbsp;Nov. 24. The first known sample dated back to Nov. 9.



But there are now increasing signs that the variant was in circulation in other countries before South Africa’s health authorities alerted the world to its presence. There are a growing number of cases being discovered with no travel connection to the region, suggesting community transmission is taking place.



In Scotland in the U.K., for example, 9 cases have been detected that have been traced back to a “single private event” held on Nov. 20 and none of the individuals involved are believed to have any recent travel history to southern Africa.



Then, on Tuesday, the Netherlands&nbsp;said it had identified the omicron variant in two test samples taken in the country between Nov. 19 and 23&nbsp;— before the variant was first reported by South Africa and travel bans came into place. It was initially believed that two flights that arrived in Amsterdam from South Africa last Sunday had brought the first cases of omicron to the country (there are now 14 confirmed cases in all).



<h3 class="wp-block-heading">Read more: <a href="https://www.cnbcafrica.com/2021/officials-offer-vaccine-reassurance-who-advises-against-travel-bans/">Officials offer vaccine reassurance; WHO advises against travel bans</a></h3>



On Tuesday, Germany also reported an omicron case in a man in Liepzig who had not been abroad, nor had contact with anyone who had been.



Dr. Angelique Coetzee, chair of the South African Medical Association and the doctor who first raised the alarm over a possible variant, told the BBC Sunday that she did so after she started to see patients around Nov.18 presenting with “unusual symptoms” that differed slightly to those associated with the delta variant, the most virulent strain of the virus to date.



Meanwhile Botswana, one of the countries affected by Western travel bans in the wake of the variant, said last Friday that it first detected the variant on four foreign nationals who entered the country on a diplomatic mission on Nov. 7 (again, far earlier than it was reported by South Africa) as part of its regular Covid surveillance. It did not identify the foreign nationals’ home country.



<h2 class="wp-block-heading"><a></a>Origin not in Africa?</h2>



At a press briefing held by WHO’s Africa office on Thursday, the UN agency’s regional experts told CNBC that the origin of the omicron variant was unknown, and they criticized restrictive travel measures placed on southern African countries.



“Our surveillance system in the global world is not perfect yet,” Dr Abdou Salam Gueye, regional emergency director in WHO’s Africa office, told CNBC Thursday during a press briefing.



“When we detect a variant or virus … usually we’re going to detect it weeks after it started its evolution. The only thing we are sure about, when a country detects a virus, is that that country’s surveillance system is good. That’s what happened in southern Africa, so this discourages the travel ban even more because &#8230; it is like a measure against a good surveillance system.”



He added that it was “not unexpected” that cases were now being discovered in Europe.



“It’s only [with] the investigations that are being conducted that we’re going to know more about the origins of this virus,” he added.



His colleague, Dr Nicksy&nbsp;Gumede-Moeletsi, a senior virologist in WHO’s Africa office, told CNBC that the number of countries reporting the omicron variant was increasing daily.



“It seems that the majority of these countries that are [reporting omicron cases] now &#8230; are coming from abroad rather than here in Africa, so we don’t know where it started and we need very good scientific evidence to study the molecular evolution of the omicron variant further.”



Experts based in Europe tend to agree that omicron has likely been circulating for longer, and more widely, than initially thought.



“The origin of Omicron is still unknown, including the location where it first spread,” Moritz Kraemer, lead researcher on the Oxford Martin Programme on Pandemic Genomics at Oxford University, told CNBC Thursday.



<h3 class="wp-block-heading">Read more: <a href="https://www.cnbcafrica.com/2021/omicron-poses-very-high-global-risk-world-must-prepare-who/">Omicron poses “very high” global risk, world must prepare -WHO</a></h3>



“That in part is due to limited sequencing coverage and surveillance in some countries” he noted, adding that South Africa has a well established system of genomic surveillance.



“I personally do not think there has been wide undetected circulation for a very long time,” Kraemer said. However he added that he expects the number of countries with imported and local transmission of omicron to be much larger than reported.



Experts are widely expecting this variant to spread quickly given early indications from South Africa, where 74% of virus genomes sequenced in the last month belonged to the new variant.



Lawrence Young, professor of molecular oncology at Warwick University, told CNBC Wednesday that “it’s no surprise that omicron has been circulating more widely and for longer than has been reported previously.”



“Once a variant is identified, particularly one that is likely to be more infectious, it will have spread far beyond the few original cases and countries. That’s the nature of infectious disease in a world where international travel is so common,” he said.



Some epidemiologists have speculated that the omicron variant could have started to spread internationally around the end of October, a hypothesis agreed with by other experts spoken to by CNBC.



Paul Hunter, professor of medicine at the Norwich School of Medicine at the University of East Anglia, told CNBC Wednesday that, given the earliest known omicron sample was taken on Nov.9 in South Africa, “clearly the infection must have been circulating a little before that unless the index case was the person in whom the variant evolved, but probably not much earlier.”



While Danny Altmann, professor of immunology at Imperial College London, said he’d “certainly agree it’s a possibility” that the omicron variant was spreading earlier than November, and that there was no certainty it originate in South Africa.



“The point that it came to attention through rising cases and excellent sequencing around Goateng [in South Africa] from the second week of November neither proves it arose near there or that this was the starting point.”

106983366-1638431182463-gettyimages-1227724940-aq5i2313

Omicron Covid variant likely circulating for longer — and more widely — than thought, experts say

<figure class="wp-block-image size-full is-resized"><img loading="lazy" decoding="async" src="https://cms.cnbcafrica.com/wp-content/uploads/2021/12/106982023-1638258044807-gettyimages-1344573386-ad616d16-e12a-4c32-885a-480db1b6bbe9.jpeg" alt="" class="wp-image-413877" width="643" height="361" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/12/106982023-1638258044807-gettyimages-1344573386-ad616d16-e12a-4c32-885a-480db1b6bbe9.jpeg 740w, https://cms.cnbcafrica.com/wp-content/uploads/2021/12/106982023-1638258044807-gettyimages-1344573386-ad616d16-e12a-4c32-885a-480db1b6bbe9-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2021/12/106982023-1638258044807-gettyimages-1344573386-ad616d16-e12a-4c32-885a-480db1b6bbe9-160x90.jpeg 160w" sizes="auto, (max-width: 643px) 100vw, 643px" /><figcaption>Yating Kuo | iStock | Getty Images</figcaption></figure>



Coffee prices have reached a 10-year high, and analysts expect tightness in the market to continue all the way into 2023.



Coffee contracts for December delivery ended Monday’s trading session at $2.34 per pound. On Thursday, coffee futures on New York’s Intercontinental Exchange reached $2.46, marking the highest price since 2011, when the commodity broke above $3 per pound.



Meanwhile, the International Coffee Association’s benchmark price was $2.07 per pound on Friday, up 85% from a year earlier.



Ole&nbsp;Hansen, head of commodity strategy at Saxo Bank,&nbsp;told CNBC that over the past 12 months, “a perfect storm of events [has been] conspiring to give our beloved bean a boost.”



“The question for future price action is how much of these developments are potentially longer-lasting,” he said in a phone call. “I think we need to focus on what’s been unfolding in Brazil this year, where we’ve had a generational low in temperatures, a very quick spell of frost which hit some of the growing areas, and we’ve had a period of drought – this has left the 2022 crop in a bit of a precarious state.”



Hansen added that these adverse weather events would affect the yield later this year, as well as in 2022 and potentially even 2023.



“We saw coffee rally to about $3 per pound back in 2011, when we had another Brazil scare,” he said. “These are really the kind of numbers that prompt the market to speculate whether we can reach those levels once again, and I think with Brazil in mind, and if the projections over the coming months continue to confirm a slowdown or reduction in output, then the risk of our brew getting more expensive is very real.”



<h3 class="wp-block-heading" id="h-read-more-uganda-s-coffee-exports-up-20-yr-yr-march-regulator">Read more: <a href="https://www.cnbcafrica.com/2021/ugandas-coffee-exports-up-20-yr-yr-march-regulator/">Uganda’s coffee exports up 20% yr/yr March – regulator</a></h3>



Alongside bad weather, global supply constraints have had a substantial impact on the coffee market because producers and roasters — the companies that refine coffee into the product we drink — are often located in different countries. Market uncertainty is also stemming from exporting countries such as Ethiopia, which is on the brink of a civil war, and Vietnam, which is seeing a rise in Covid-19 cases that could hit production.  



“I think on balance we have a market which is, for the first time in years, starting to show some tightness,” Hansen added.



Maximillian Copestake, executive director of European coffee sales at Marex, said that coffee was engaged in “a huge price race that is predominantly driven by freight dislocations.”



“For the last five to eight years, we’ve had supply [concentrated in] one or two big coffee-producing origins, one of them being Brazil, one of them being Vietnam,” he told CNBC via telephone.



“If you have damage in one or two of those countries, which we have had, all of a sudden the market goes crazy to try and encourage other countries to produce coffee. That is the underlying principle, and then the cherry on the top has really been the freight disruptions. So, what was already a tight balance sheet, which should have traded out in the prices rallying potentially later on in the crop, have been accentuated by these freight disruptions we’ve seen.”



Copestake noted that it takes around two years for coffee production to respond to a change in price.



“I don’t think we’re by any means out of the woods yet,” he told CNBC. “But when the price rallies, you drag every bag of coffee available in every farmer’s warehouse out to the market to commercialize, because the prices are excellent. So there is incentivization to plant more, but also to minimize stocks at origin and bring those stocks to destination. I think we’re probably in the course of doing that.”



He added that he expects prices to remain high and volatile looking ahead.

International

‘Obscene inequality’: Oxfam says taxing the world’s richest could help save lives

UK’s Boris Johnson in leadership crisis, accused of lying about ‘industrial scale partying’ during Covid lockdowns

World Bank slashes global growth forecast and warns about growing inequality

Hiring falters in December as payrolls rise only 199,000, though the unemployment fell to 3.9%

The Federal Reserve is scaring markets with the triple threat of policy tightening

Global markets slump on hawkish Fed minutes

Goldman says oil could hit $100, demand might reach ‘new record high’ in the next two years

Coffee production hurts the planet. Scientists think they may have another way

Toyota to invest $35 billion into battery-powered EVs and roll out 30 models by 2030

‘Even Santa himself won’t be able to deliver’: How the global chip shortage could dampen Christmas

New Zealand to ban young people from ever being able to buy cigarettes

Global tax deal leaves billion-dollar loopholes, REUTERS Analysis finds

IMF: Poor nations could face ‘economic collapse’ unless G20 extends debt relief

Nepal to ban arrivals from 8 African countries, Hong Kong over Omicron fears

Barclays, RBS, HSBC, Credit Suisse and UBS fined for taking part in forex trading cartel

Omicron Covid variant likely circulating for longer — and more widely — than thought, experts say

Coffee prices are at 10-year highs, and analysts say they have much further to go

News Tips

Advertise With Us

International

‘Obscene inequality’: Oxfam says taxing the world’s richest could help save lives

UK’s Boris Johnson in leadership crisis, accused of lying about ‘industrial scale partying’ during Covid lockdowns

World Bank slashes global growth forecast and warns about growing inequality

Hiring falters in December as payrolls rise only 199,000, though the unemployment fell to 3.9%

The Federal Reserve is scaring markets with the triple threat of policy tightening

Global markets slump on hawkish Fed minutes

Goldman says oil could hit $100, demand might reach ‘new record high’ in the next two years

Coffee production hurts the planet. Scientists think they may have another way

Toyota to invest $35 billion into battery-powered EVs and roll out 30 models by 2030

‘Even Santa himself won’t be able to deliver’: How the global chip shortage could dampen Christmas

New Zealand to ban young people from ever being able to buy cigarettes

Global tax deal leaves billion-dollar loopholes, REUTERS Analysis finds

IMF: Poor nations could face ‘economic collapse’ unless G20 extends debt relief

Nepal to ban arrivals from 8 African countries, Hong Kong over Omicron fears

Barclays, RBS, HSBC, Credit Suisse and UBS fined for taking part in forex trading cartel

Omicron Covid variant likely circulating for longer — and more widely — than thought, experts say

Coffee prices are at 10-year highs, and analysts say they have much further to go

News Tips

Advertise With Us

Newsletters