<ul class="wp-block-list"><li>Food makes up 40% of CPI baskets in low income countries</li></ul>



<ul class="wp-block-list"><li>UN food price index hits record in February, March</li></ul>



<ul class="wp-block-list"><li>More governments opt to introduce support measures</li></ul>



<ul class="wp-block-list"><li>Risk of social unrest is on the rise over food, fuel price rises</li></ul>



By Karin Strohecker, Ezgi Erkoyun and Sarah El Safty



LONDON/ISTANBUL/CAIRO, May 17 (Reuters)&nbsp;&#8211;&nbsp;Like for millions of people in developing&nbsp;and emerging market&nbsp;countries around the world, shopping for staple foods has turned from a necessity into a luxury for Selcuk Gemici.



The 49-year-old, who works in an auto repair shop in Turkey&#8217;s largest city Istanbul and lives with his wife and two children in his father&#8217;s house, says fresh produce is often out of reach with his family living on pasta, bulgur and beans.



&#8220;Everything became so expensive, we cannot buy and eat what we want &#8211; we only buy what we can afford now,&#8221; said Gemici. &#8220;My children are not properly nourished.&#8221;



Global food prices have climbed for two years, fuelled by COVID-19 disruptions and weather woes. Supply shocks to grains and oils from Russia&#8217;s invasion of Ukraine saw them hit an all-time record in February, and again in March.&nbsp;<a href="https://www.reutersconnect.com/all?search=all%3AL5N2WY26Q&amp;linkedFromStory=true" target="_blank" rel="noreferrer noopener">Read full story</a>



Inflation rates have soared, with energy price rises adding to pressure. Turkey or Argentina with annual inflation of 70% and around 60% might be outliers, but readings are into double-digits in countries from Brazil to Hungary. It makes U.S. inflation at 8.3% look modest in comparison.



Rising food prices are a hot topic in emerging market, raising the risk of civil unrest with echoes of the Arab spring and putting policy makers in a bind between stepping in with fiscal support to ease the pain on their population or preserve government finances.



Food is the single largest category in inflation baskets &#8211; the selection of goods used to calculate the cost of living &#8211; in many developing nations, accounting for around half in countries like India or Pakistan and on average for some 40% in low-income countries, International Monetary Fund data shows.



Food producers have become more protective: India on the weekend announcing a ban on wheat exports while Indonesia halted exports of palm oil to control soaring prices at home in late April.&nbsp;<a href="https://www.reutersconnect.com/all?search=all%3AL2N2X80FF&amp;linkedFromStory=true" target="_blank" rel="noreferrer noopener">Read full story</a><a href="https://www.reutersconnect.com/all?search=all%3AL2N2X30P4&amp;linkedFromStory=true" target="_blank" rel="noreferrer noopener">Read full story</a>



And with the war in Ukraine not only disrupting food but also fertilizer supplies, food inflation could be more longer-lasting, Marcelo Carvalho, head of global emerging markets research at BNP Paribas told Reuters.



&#8220;This is here to stay,&#8221; said Carvalho. &#8220;Food is very salient &#8211; when there is a change in food prices, the perception about inflation is magnified &#8211; that feeds into inflation expectations that are more easily unanchored.&#8221;



HOT SPOT



For Um Ibrahim, a 60-year-old widow and street vendor selling headscarves in front of a mosque in the middle-class district of Madinet Nasr in Egypt&#8217;s capital Cairo, feeding her four children has become much harder.



&#8220;All prices rose &#8211; clothes, vegetables, poultry, eggs &#8211; what am I going do?&#8221; she asked, laying out her ware on a cloth.



Egypt, one of the world&#8217;s biggest wheat importers, has seen inflation soar more than 13% in April, and is expected to hike interest rates again at a meeting this week after it devalued the currency by 14% in mid-March.&nbsp;<a href="https://www.reutersconnect.com/all?search=all%3AL2N2VR0S1&amp;linkedFromStory=true" target="_blank" rel="noreferrer noopener">Read full story</a>



Emerging market policy makers, having jacked up interest rates by hundreds of basis points cumulatively since 2020 to curb price pressures and ensure a bond premium to rising U.S. yields for investors, have to perform a balancing act between taming inflation and keeping fragile growth alive at a time of rising global interest rates.



Emerging economies may expand just 4.6% this year, the World Bank forecasts, compared with an earlier 6.3% prediction.



Polina Kurdyavko, head of EM debt at BlueBay Asset Management, says governments have three options: Provide bigger subsidies to consumers or bite the bullet that is to let prices rise and face inflation and social unrest, or do something in between.



&#8220;There are no easy solutions,&#8221; Kurdyavko said.



A raft of countries have introduced measures: Turkey has raised the minimum wage by 50% in December to address a currency crash and inflation spike.&nbsp;<a href="https://www.reutersconnect.com/all?search=all%3AL8N2T14KZ&amp;linkedFromStory=true" target="_blank" rel="noreferrer noopener">Read full story</a>&nbsp;Chile will up minimum pay this year as well.&nbsp;<a href="https://www.reutersconnect.com/all?search=all%3AL3N2WO37U&amp;linkedFromStory=true" target="_blank" rel="noreferrer noopener">Read full story</a>



South Africa&#8217;s government is debating whether to increase a social relief grant launched in 2020 and make the scheme permanent.&nbsp;<a href="https://www.reutersconnect.com/all?search=all%3AL5N2VC5HD&amp;linkedFromStory=true" target="_blank" rel="noreferrer noopener">Read full story</a>



Economists fear emerging economies are facing a fresh wave of unrest on the back of the latest increases in food prices. North Africa, where food inflation was a contributor to the Arab Spring revolts a decade ago, looked particularly vulnerable, said Beata Javorcic, chief economist at the European Bank for Reconstruction and Development.



&#8220;The irony of this war is that while everybody expected Russia to have a crisis, it is actually North African countries that are closer to having an emergency situation due to high food prices,&#8221; she said.



But pain is expected to stretch further: Three quarters of nations expected to be at high-risk or extreme risk of civil unrest by the fourth quarter of 2022 were middle-income countries, risk consultancy Verisk Maplecroft said last week.&nbsp;<a href="https://www.reutersconnect.com/all?search=all%3AL5N2X276O&amp;linkedFromStory=true" target="_blank" rel="noreferrer noopener">Read full story</a>



Appeasing inflation pressures through spending will come at a fiscal cost that could spell trouble further down the line, said BNP&#8217;s Carvalho.



&#8220;In emerging markets, fiscal sins are forgiven but not forgotten,&#8221; he said. &#8220;Over the last couple of years, everybody felt like they have a blank cheque &#8230; in part because rates were so low. Now that interest rates are rising, it gets a bit trickier.&#8221;



(Reporting by Karin Strohecker; Additional reporting by Jorgelina do Rosario; Editing by David Evans)

the-food market-3147758_1920

Food inflation pain puts emerging markets between rock and hard place

ABUJA, May 16 (Reuters)&nbsp;&#8211;&nbsp;Nigeria&#8217;s economic crimes agency said on Monday night it had arrested the country&#8217;s accountant general over charges of diverting public funds and money laundering to the tune of 80 billion naira ($193 million).



Africa&#8217;s biggest economy and energy producer, Nigeria has struggled for decades with endemic corruption among senior public servants and the political elite, who many Nigerians blame for widespread poverty in the country.



The Economic and Financial Crimes Commission (EFCC) said in a statement it had invited Ahmed Idris, the administrative head of the national treasury, on several occasions to answer questions on the charges but he had failed to present himself.



Idris could not be reached on his mobile phone for comment.



The EFCC said Idris used &#8220;proxies, family members and close associates&#8221; in deals and schemes to defraud the government and invested the proceeds in real estate in the nation&#8217;s capital Abuja and his home state of Kano in northern Nigeria.



The agency has in the past successfully prosecuted a former head of police and former state governors among several high ranking government officials and politicians.



Earlier this year, the government said EFCC recovered at least $750 million in local and foreign currency linked to corruption and fraud in 2021.



(Editing by MacDonald Dzirutwe; Editing by Sandra Maler)

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Nigeria’s accountant general faces corruption charges after arrest￼

WASHINGTON, May 16 (Reuters)&nbsp;&#8211;&nbsp;U.S. President Joe Biden has authorized the redeployment of fewer than 500 American troops into Somalia, U.S. officials said on Monday, after Donald Trump ordered their withdrawal during his presidency.



Prior to Trump&#8217;s withdrawal, the United States had about 700 troops in Somalia focused on helping local forces defeat the al Qaeda-linked al Shabaab insurgency.



&#8220;This is a repositioning of forces already in theater who have traveled in and out of Somalia on an episodic basis,&#8221; White House press secretary Karine Jean-Pierre told reporters. The exact number of troops was not mentioned at the briefing.



A senior administration official, speaking on the condition of anonymity, said Biden had approved the request from U.S. Defense Secretary Lloyd Austin to &#8220;enable a more effective fight against al Shabaab.&#8221;



The Pentagon said the troops would not be directly fighting in combat operations, but working to train, advise and equip Somali forces.



&#8220;Secretary&#8217;s (Austin&#8217;s) view was that the episodic engagement model was inefficient and increasingly unsustainable,&#8221; Pentagon spokesman John Kirby told reporters.



The revamped troop presence will include fewer than 500 U.S. troops, another U.S. official said.



Al Shabaab is seeking to topple the government and establish its own rule in Somalia based on its strict interpretation of Islamic Sharia law.



The insurgent group frequently carries out bombings in Mogadishu and elsewhere as part of its war against the Horn of Africa country&#8217;s central government.



&#8220;It&#8217;s good news to have U.S. troops on the ground and counterterrorism efforts can be reinitiated,&#8221; said Colonel Ahmed Sheikh, the former commander of Somalia&#8217;s elite Danab Special Forces unit, trained by U.S. troops.



&#8220;This will be a huge boost for the new president – he has a big task ahead,&#8221; he added.



Former Somali leader Hassan Sheikh Mohamud won the presidency again in voting by parliamentarians on Sunday.



Somalia has endured conflict and clan battles with no strong central government since the fall of dictator Mohamed Siad Barre in 1991. The government has little control beyond the capital and the African Union contingent guards in an Iraq-style &#8220;Green Zone.&#8221;



While the United States did not have troops in Somalia since Trump ordered their withdrawal in December 2020, the military has occasionally carried out strikes in the country and has had troops in nearby countries.



(Reporting by Steve Holland and Idrees Ali in WashingtonAdditional rerpoting by Katharine Houreld and Jeff Mason Editing by Bill Berkrot and Matthew Lewis)

somalia-flag_Public Domain Pictures

Biden approves redeployment of under 500 ground troops to Somalia

GABORONE, May 16 (Reuters)&nbsp;&#8211;&nbsp;Botswana, Africa&#8217;s top diamond producer, sees a prolonged ban on Russian diamonds opening the way for synthetic gems to expand market share, the country&#8217;s minister told a mining conference on Monday.



The United States, the world largest market for natural diamonds, imposed sanctions on Russia&#8217;s state-controlled Alrosa&nbsp;ALRS.MM&nbsp;in April, aiming to cut off a source of revenue for Moscow after its February invasion of Ukraine.<a href="https://www.reutersconnect.com/all?search=all%3AL5N2W61HG&amp;linkedFromStory=true" target="_blank" rel="noreferrer noopener">Read full story</a>



Alrosa, the world&#8217;s largest producer of rough diamonds, accounted for about 30% of global output in 2021.



Botswana&#8217;s Minister of Minerals and Energy Lefoko Moagi said the ban on Russia diamonds might push prices up to the benefit of rival producers but he also said the gap would be hard to fill.



&#8220;We see the 30% gap that will be left by the ban being plugged by something else that is not natural. And for us that will be a challenge,&#8221; he said.



Jacob Thamage, head of Botswana&#8217;s Diamond Hub, said uncertainty over the Ukraine conflict makes it difficult for Botswana and other natural diamond miners to fill the supply gap as ramping up operations requires significant investment.



&#8220;You don&#8217;t want to invest a lot of money to up-scale and then the war ends the next day,&#8221; Thamage said. &#8220;We also see the higher prices pushing consumers to substitutes such as the synthetics and this can cause problems for us if we cede the market to unnatural stones.&#8221;



Sales at Debswana, a joint venture between Anglo American&nbsp;AAL.L&nbsp;unit De Beers and Botswana&#8217;s government, accounts for almost all of Botswana diamonds exports. These stood at $3.466 billion in 2021 compared with $2.120 billion in 2020.<a href="https://www.reutersconnect.com/all?search=all%3AL8N2UB4O2&amp;linkedFromStory=true" target="_blank" rel="noreferrer noopener">Read full story</a>



Thamage also fears that consumers might start to shun natural diamonds due to traceability issues.



&#8220;There is an increased fear that buyers of diamonds will begin to treat all natural diamonds as conflict diamonds and therefore shift to unnatural diamonds,&#8221; he said.



(Reporting by Brian Benza, Editing by Nelson Banya and Jane Merriman)

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Botswana sees Russian diamond ban opening door to synthetic gems

LONDON, May 16 (Reuters)&nbsp;&#8211;&nbsp;Improving demand and lower supply will help palladium and rhodium swing back into deficit this year and reduce platinum&#8217;s surplus, consultants Metals Focus said on Monday.



The three precious metals are used by automakers in engine exhaust systems, where they neutralise harmful emissions. Platinum is also used in other industries and for jewellery and investment.



Demand from auto makers, which are beginning to overcome a shortage of semiconductors that forced them to cut production, will lift demand for all three metals, Metals Focus said.



On the supply side, palladium and platinum production could be constrained by major producer Russia&#8217;s conflict with Ukraine, while output from another key producer, South Africa, will fall, it said.



Logistical issues and limited automotive scrap feedstock will also impede supply from recycling.



Metals Focus said the roughly 10 million ounce a year palladium market should swing back from its first surplus in 10 years in 2021 to a deficit of 521,000 ounces in 2022 and that prices would average $2,290 an ounce this year.



Palladium&nbsp;XPD=&nbsp;jumped to a record high of $3,440.76 an ounce earlier this year and now costs around $1,930 an ounce.



The surplus in the nearly eight million ounce a year platinum market&nbsp;XPT=&nbsp;is expected be 40% lower than in 2021 at 477,000 ounces this year, while prices will average $990 an ounce, Metals Focus said.



It predicted a deficit of 30,000 ounces in 2022 in the one-million-ounce rhodium market, included in the Metals Focus report for the first time.



Rhodium&#8217;s annual average price&nbsp;RHOD-LON&nbsp;will fall 17% from last year to $17,750 an ounce in 2022, the report said. Rhodium currently trades around $15,600.



(Reporting by Zandi Shabalala; editing by David Evans)

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Palladium to swing back into deficit, platinum surplus to fall

<ul class="wp-block-list"><li>China stocks slip 0.3%-0.8% on weak data</li></ul>



<ul class="wp-block-list"><li>Rand down 0.4% amid growth concerns, power cuts, gold price decline</li></ul>



<ul class="wp-block-list"><li>Turkish March current account deficit $5.554 billion; lira slips 0.5%</li></ul>



By Anisha Sircar and Bansari Mayur Kamdar



May 16 (Reuters)&nbsp;&#8211;&nbsp;Emerging market stocks and currencies hovered just above their lowest level in almost two years on Monday as dire Chinese economic data renewed concerns around global growth, while the South African rand came under pressure from domestic power cuts.



The MSCI index for emerging market (EM) equities&nbsp;.MSCIEF&nbsp;inched 0.2% higher, still down 6.5% on the month and nearly 20% on the year, while currencies&nbsp;.MIEM00000CUS&nbsp;were little changed against a strong greenback after a sixth straight weekly decline last week.



The dollar index&nbsp;=USD&nbsp;was perched at a two-decade peak as investors ramped up U.S. monetary policy tightening expectations.&nbsp;FRX/



&#8220;The main factor weighing on risky emerging assets is the prospect of further rate hikes by the Fed, accompanied by growing concerns that the global economy could be heading for recession,&#8221; said Piotr Matys, senior FX analyst at In Touch Capital Markets.



Concerns around monetary tightening amid slowing global growth, rising inflation and a cooling commodity price rally have hampered the attractiveness of emerging markets.



China stocks&nbsp;.SSEC,&nbsp;.CSI300&nbsp;fell between 0.3% and 0.8% as data showed the country&#8217;s April retail sales shrank 11.1% on the year, almost twice the drop forecast, while industrial output fell 2.9%.&nbsp;<a href="https://www.reutersconnect.com/all?search=all%3AL2N2X8047&amp;linkedFromStory=true" target="_blank" rel="noreferrer noopener">Read full story</a>



South Africa&#8217;s rand&nbsp;ZAR=&nbsp;fell 0.4% as domestic power cuts, weaker gold prices and a blurry growth outlook weighed on the currency.&nbsp;<a href="https://www.reutersconnect.com/all?search=all%3AL5N2X818V&amp;linkedFromStory=true" target="_blank" rel="noreferrer noopener">Read full story</a>



Investor focus was on a monetary policy decision expected on Thursday where the central bank is likely to make its first 50 basis point repo rate hike in more than six years.&nbsp;<a href="https://www.reutersconnect.com/all?search=all%3AL5N2X398J&amp;linkedFromStory=true" target="_blank" rel="noreferrer noopener">Read full story</a>



The Czech crown&nbsp;EURCZK=&nbsp;inched 0.3% higher after hitting two-month lows last week. Data showed industrial producer prices rose 26.6% year-on-year in April, greater than market expectations.&nbsp;<a href="https://www.reutersconnect.com/all?search=all%3AP7N2QN02E&amp;linkedFromStory=true" target="_blank" rel="noreferrer noopener">Read full story</a>



The Czech National Bank launched a &#8220;true monetary-policy intervention&#8221; when it entered the market on May 12 to stop a weakening of the crown, board member Tomas Holub said Friday.&nbsp;<a href="https://www.reutersconnect.com/all?search=all%3AL2N2X50HP&amp;linkedFromStory=true" target="_blank" rel="noreferrer noopener">Read full story</a>



The Sri Lankan rupee&nbsp;LKR=&nbsp;fell&nbsp;1.2%&nbsp;ahead of an address by the crisis-hit country&#8217;s new prime minister, Ranil Wickremesinghe.&nbsp;<a href="https://www.reutersconnect.com/all?search=all%3AL3N2X812C&amp;linkedFromStory=true" target="_blank" rel="noreferrer noopener">Read full story</a>



Turkey&#8217;s lira&nbsp;TRY=&nbsp;fell 0.5% as the central bank said the country&#8217;s current account deficit in March widened to $5.554 billion, more than the forecasted $5.371 billion, but is up about 18% from its record low hit in December.&nbsp;<a href="https://www.reutersconnect.com/all?search=all%3AAPN0KPIRT&amp;linkedFromStory=true" target="_blank" rel="noreferrer noopener">Read full story</a>



&#8220;The government notion that Turkey will be able to bring inflation lower in coming quarters if the current account deficit narrows is being put to a major test,&#8221; Matys said.



For GRAPHIC on emerging market FX performance in 2022, see&nbsp;<a href="http://tmsnrt.rs/2egbfVh" target="_blank" rel="noreferrer noopener">http://tmsnrt.rs/2egbfVh</a>



For GRAPHIC on MSCI emerging index performance in 2022, see&nbsp;<a href="https://tmsnrt.rs/2OusNdX" target="_blank" rel="noreferrer noopener">https://tmsnrt.rs/2OusNdX</a>



For TOP NEWS across emerging markets&nbsp;<a href="https://www.reutersconnect.com/all?search=all%3ATOPEMRG&amp;linkedFromStory=true" target="_blank" rel="noreferrer noopener">Read full story</a>



For CENTRAL EUROPE market report, see&nbsp;CEE/



For TURKISH market report, see&nbsp;.IS



For RUSSIAN market report, see&nbsp;RU/RUB



(Reporting by Anisha Sircar and Bansari Mayur Kamdar in Bengaluru; Editing by Kirsten Donovan)

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EMERGING MARKETS-Battered stocks inch up; S. African rand falls on power cuts, growth fears

<ul class="wp-block-list"><li>Lawmakers choose Hassan Sheikh Mohamud for president</li></ul>



<ul class="wp-block-list"><li>Vote takes place behind barricades due to conflict</li></ul>



<ul class="wp-block-list"><li>Former education campaigner Mohamud, 66, faces Islamist war</li></ul>







By Abdi Sheikh



MOGADISHU, May 16 (Reuters)&nbsp;&#8211;&nbsp;Former Somali leader Hassan Sheikh Mohamud won the presidency again in voting by parliamentarians on Sunday in an airport hangar protected by blast walls from Islamist insurgents whom he must now fight for a second time.



The 66-year-old, who ruled from 2012 to 2017, reversed the previous election to defeat incumbent President Mohamed Abdullahi Mohamed by 214-110 votes in a third-round runoff whose result was confirmed around midnight.



&#8220;We have to move ahead, we do not need grudges. No avenging,&#8221; Mohamud said in his acceptance speech from the airport compound in the capital Mogadishu patrolled by African Union (AU) peacekeepers.



Supporters defied a curfew to pour onto the streets of Mogadishu, cheering and firing guns into the air.



The former education campaigner and peace activist faces a daunting task in the nation of 15 million people which is suffering its worst drought in four decades and has endured seemingly never-ending conflict since 1991.



Though just holding the election was a success of sorts, many Somalis were sceptical of any real improvement.



Most of the 36 candidates were old faces recycled from the past who had done little to stem war and corruption, they complained. Votes are anyway influenced more by money changing hands than political platforms, Somalis and analysts say.



&#8220;Hassan Sheikh is not good but he is the lesser of the two evils. We hope Somalia will be better,&#8221; said Halima Nur, a mother-of-four in Mogadishu.



&#8220;We hope this time Hassan Sheikh Mohamud will improve and become a better leader. We hope Somalia will be peaceful, though this may take time,&#8221; said student Mohamed Ismail.



&#8216;A VERY TEDIOUS TASK&#8217;



The United Nations-backed vote was delayed by more than a year due to squabbling in government, but had to be held this month to ensure a $400 million International Monetary Fund programme.



During the first round of voting, blasts from mortar shells rang out near the site but did not disrupt proceedings. There was no claim of responsibility, but Somalis are used to attacks on state institutions from al Shabaab militants.



Somalia has endured conflict and clan battles with no strong central government since the fall of dictator Mohamed Siad Barre in 1991. The government has little control beyond the capital and the AU contingent guards an Iraq-style &#8220;Green Zone&#8221;.



&#8220;Let us pray for the new president, it is a very tedious task,&#8221; said outgoing leader Mohamed, known as &#8220;Farmaajo&#8221; due to a reputed love of Italian formaggio cheese.



He drew criticism from Somalis and foreign donors for trying to extend his tenure last year.



After long bouts of infighting within government, sometimes spilling over into gun battles between factions of the security forces, the incoming leader sought to strike a new note.



&#8220;We cannot forget the painful past but we can forgive,&#8221; said Mohamud. &#8220;Here in this hall I had handed over the presidency to Farmaajo in 2017 and tonight he handed over to me.&#8221;



Born in the Hiran region of central Somalia, Mohamud has a master&#8217;s degree in technical education from India&#8217;s Barkatullah University. He co-founded the SIMAD university in Mogadishu.



Though credited with pushing al Shabaab out of some towns when he was president, Mohamud failed to deliver a crushing blow to the militants who now control swathes of Somalia and run a lucrative extortion business.



(Reporting by Abdi Sheikh in Mogadishu; Writing by Elias Biryabarema and Andrew Cawthorne;Editing by Jonathan Oatis)

Ex-Somali leader Mohamud wins presidency to face war and drought

By Tom Sims



FRANKFURT, May 15 (Reuters)&nbsp;&#8211;&nbsp;Deutsche Bank&nbsp;DBKGn.DE&nbsp;is not financing a pipeline in Africa that environmental campaigners have said will displace thousands of families and disrupt nature reserves, a person with knowledge of the matter said on Sunday.



Germany&#8217;s largest lender has come under pressure to clarify its stance on the financing of the planned $3.5 billion East African Crude Oil Pipeline (EACOP), which would stretch more than 1,400 kilometres from Uganda to Tanzania.



Deutsche has so far not commented on the project despite the pressure increasing ahead of the bank&#8217;s annual general meeting on Thursday. The environmental activist group 350.org is organising a series of protests in the coming days.



&#8220;Many major banks and insurers have already pulled out of this devastating project. We&#8217;re raising the pressure on Deutsche Bank, as one of the only major banks in Europe that has not yet withdrawn their support for EACOP,&#8221; 350.org has said ahead of the planned protests.



The French energy giant Total&nbsp;TTEF.PA, which is developing the pipeline with China National Offshore Oil Corporation, has said it was taking steps to mitigate the environmental and human impact of the project.&nbsp;<a href="https://www.reutersconnect.com/all?search=all%3AL1N2L60K3&amp;linkedFromStory=true" target="_blank" rel="noreferrer noopener">Read full story</a>



In recent years, Deutsche Bank has marketed itself as a bank that companies can turn to as they transition to a greener future.



&#8220;We have placed sustainability at the core of our strategy,&#8221; Chief Executive Officer Christian Sewing said last year.



Deutsche Bank has never been involved in the financing of the pipeline, said the person, speaking on condition of anonymity.



Deutsche Bank said in a statement that it doesn&#8217;t comment on clients, but that it &#8220;supports the transition to a low-carbon economy&#8221; and its policies prohibit it from knowingly financing projects that clear primary forests, areas of high conservation value and peatlands.



The campaign called&nbsp;<a href="https://www.stopeacop.net/home" target="_blank" rel="noreferrer noopener">#STOPEACOP</a>&nbsp;says on its website that the pipeline puts at risk water for millions of people, and will cut through land critical for elephants, lions and chimpanzees.



(Reporting by Tom SimsEditing by Riham Alkousaa, Maria Sheahan and David Evans)



<a href="https://www.reutersconnect.com/all?categories=BUS_SPO_NEWS&amp;id=tag%3Areuters.com%2C2022%3Anewsml_L5N2X70CJ%3A1420942635&amp;languages=ENG&amp;media-types=T&amp;regions=AFR&amp;sources=RTRS#"></a><a href="mailto:?body=Janet.Maloka%40abn360.com%20shared%20a%20story%20with%20you%20on%20Reuters%20Connect.%0A%0A%0AUPDATE%201-Deutsche%20Bank%20not%20financing%20EACOP%20African%20pipeline%20-%20source%0A%0A%0Ahttps%3A%2F%2Fwww.reutersconnect.com%2Fall%3Fid%3Dtag%253Areuters.com%252C2022%253Anewsml_L5N2X70CJ%26share%3Dtrue%0A%0A-----------------%0A%0AIf%20you%20are%20unable%20to%20see%20the%20news%20item%20or%20receive%20an%20error%2C%20be%20sure%20that%20the%20appropriate%20feeds%20are%20selected%20in%20your%20account%20settings%3Ahttps%3A%2F%2Fwww.reutersconnect.com%2Fsettings%0A&amp;subject=Reuters%20Story%3A%20UPDATE%201-Deutsche%20Bank%20not%20financing%20EACOP%20African%20pipeline%20-%20source"></a><a href="https://www.reutersconnect.com/all?categories=BUS_SPO_NEWS&amp;id=tag%3Areuters.com%2C2022%3Anewsml_L5N2X70CJ%3A1420942635&amp;languages=ENG&amp;media-types=T&amp;regions=AFR&amp;sources=RTRS#"></a>

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Deutsche Bank not financing EACOP African pipeline – source

KEY POINTS



<ul class="wp-block-list"><li>Retail sales fell by 11.1% in April from a year ago, more than the 6.1% decline predicted in a Reuters poll.</li></ul>



<ul class="wp-block-list"><li>Industrial production dropped by 2.9% in April from a year ago, in contrast with expectations for a slight increase of 0.4%.</li></ul>



<ul class="wp-block-list"><li>The unemployment rate in China’s 31 largest cities climbed to a new high of 6.7% in April, according to data going back at least to 2018.</li></ul>



<ul class="wp-block-list"><li>Shanghai city announced Sunday that it would start to allow restaurants to reopen gradually, and said Monday the city aimed to resume normal production and life by the middle of June.</li></ul>



BEIJING — China reported a drop in retail sales and industrial production in April — far worse than analysts had expected.



Retail sales fell by 11.1% in April from a year ago, more than the 6.1% decline predicted in a Reuters poll.



Industrial production dropped by 2.9% in April from a year ago, in contrast with expectations for a slight increase of 0.4%. The output of mining and utilities businesses grew.



But manufacturing fell by 4.6%, mostly dragged down by a slump in the auto sector and equipment manufacturing, said Statistics Bureau Spokesperson Fu Linghui. In addition to Covid, he said industrial production faces pressure from insufficient market demand, rising costs and other factors.



Last month, the persistent spread of Covid and resulting stay-home orders —&nbsp;<a href="https://www.cnbc.com/2022/04/17/shanghai-by-the-numbers-chinas-covid-lockdowns.html">primarily in Shanghai</a>&nbsp;— forced factories to close or operate at limited capacity.



The “increasingly grim and complex international environment and greater shock of [the] Covid-19 pandemic at home obviously exceeded expectation, new downward pressure on the economy continued to grow,” the statistics bureau said in a statement. The bureau said the impact of Covid is temporary and that the economy “is expected to stabilize and recover.”



Fixed-asset investment for the first four months of the year rose by 6.8% from a year ago, slightly missing expectations of 7% growth. Investment in real estate declined by 2.7%, while that in manufacturing rose by 12.2.% and that in infrastructure rose by 6.5%.



China’s passenger car production&nbsp;<a href="https://www.cnbc.com/2022/05/11/china-autos-shanghai-production-plunged-in-april-after-covid-lockdown.html">dropped by 41.1% year-on-year in April</a>, according to the China Passenger Car Association. The auto sector in China accounts for about one-sixth of jobs and roughly 10% of retail sales, according to&nbsp;<a href="https://www.cnbc.com/2020/05/04/electric-cars-take-the-spotlight-in-chinas-post-coronavirus-stimulus-plans.html">official figures for 2018</a>&nbsp;compiled by the Ministry of Commerce.



Auto sales dropped by 31.6% in April from a year ago, the statistics bureau data showed. That was better than the peak of the decline in early 2020 — down 37% year-on-year in January and February that year — but worse than the 0% year-on-year change recorded for April 2020.



Catering sales plunged by 22.7% — better than a 31.1% year-on-year drop in April 2020. Restaurants in Shanghai were essentially closed in April, while&nbsp;<a href="https://www.cnbc.com/2022/05/03/beijing-city-bans-in-restaurant-dining-as-chinas-covid-controls-tighten.html">Beijing city’s ban on dining in restaurants only took effect in early May.</a>



Within retail sales, only beverages, medicine, food and petroleum products saw year-on-year growth.



“Although Covid case numbers have declined markedly from the peak in mid-April, the unwinding of lockdowns has been extremely slow, due partly to the caution among local government officials,” Ting Lu, Chief China Economist at Nomura, said in a note. “Therefore, we believe local lockdowns will still severely impact the production-end of the economy in May and view a quick turnaround as all but impossible.”



Shanghai city announced Sunday that it would start to allow restaurants to reopen gradually, and said Monday the city aimed to resume normal production and life by the middle of June.



<h2 class="wp-block-heading" id="h-jobless-rate-ticks-higher"><a></a>Jobless rate ticks higher</h2>



The unemployment rate in China’s 31 largest cities climbed to a new high of 6.7% in April, according to data going back at least to 2018.



The unemployment rate across cities rose by 0.3 percentage points from March to 6.1% in April. The jobless rate among those aged 16 to 24 was nearly three times higher at 18.2%.



For an additional sense of the scale of economic slowdown in April, other data showed a slump in business and household demand for loans.



Total social financing — a broad measure of credit and liquidity — roughly halved last month from a year ago to 910.2 billion yuan ($134.07 billion), the People’s Bank of China said late Friday.



However, Macquarie’s Chief China Economist Larry Hu said he expected the drop in credit demand would be short lived. He pointed out that on Sunday, the central government took its “first action &#8230; to save property” by cutting mortgage rates for first-time homebuyers.



The rate, which used to follow the five-year loan prime rate as a benchmark, is now 20 basis points below that.



“Today’s cut is far from enough to turn the property sector around, but more property easing would come,” Hu said in a note Sunday.



Real estate and related industries account for about a quarter of China’s GDP, according to Moody’s.

105949584-1559711930288gettyimages-1078405216

China’s economic data disappoint in April as Covid controls weigh

KEY POINTS



<ul class="wp-block-list"><li>Twitter’s stock plummeted 18% in premarket trading following the initial announcement, but trimmed some losses after the second tweet.</li><li>Musk announced last month that he intends to buy Twitter for $44 billion.</li><li>He’s tweeted that one of his main priorities would be to remove “spam bots” from the platform.</li></ul>



<a href="https://www.cnbc.com/elon-musk/">Elon Musk</a>&nbsp;announced Friday that his&nbsp;<a href="https://www.cnbc.com/quotes/TWTR" target="_blank" rel="noreferrer noopener">Twitter</a>&nbsp;deal is on hold until he receives more information about how many fake accounts there are on the social media platform.



In a follow-up tweet around two hours later, Musk added that he was “still committed to the acquisition.”



Twitter’s stock plummeted 18% in premarket trading following the initial announcement, but trimmed some losses after the second tweet. A spokesperson for the social media company did not immediately respond to a CNBC request for comment.



<a href="https://www.cnbc.com/quotes/TSLA" target="_blank" rel="noreferrer noopener">Tesla</a>&nbsp;CEO Musk&nbsp;<a href="https://www.cnbc.com/2022/04/14/elon-musk-offers-to-buy-twitter-for-54point20-a-share-saying-it-needs-to-be-transformed-as-private-company.html">announced last month</a>&nbsp;that he intends to buy Twitter for $44 billion and he’s previously tweeted that one of his main priorities would be to remove “spam bots” from the platform.



Even before Friday’s announcement, the company’s market value had fallen to&nbsp;<a href="https://www.cnbc.com/2022/05/12/twitter-market-cap-has-dropped-to-9-billion-below-musk-purchase-price.html">$9 billion beneath the offer price due to concerns about the deal.</a>



Musk, who is <a href="https://www.cnbc.com/2022/05/05/elon-musk-expected-to-serve-as-temporary-twitter-ceo-after-deal-closes.html">expected to serve as Twitter’s temporary CEO</a> if the deal goes ahead, would have to pay a $1 billion breakup fee should <a href="https://www.cnbc.com/2022/04/26/elon-musk-will-owe-twitter-1-billion-if-he-cant-secure-financing.html">he choose to walk away</a>. Musk is worth more than $220 billion.



Twitter estimated in a filing earlier this month that fewer than 5% of its monetizable daily active users during the first quarter were bots or spam accounts.



Musk, who is the world’s richest person on paper, now wants the company to confirm this before he continues with the deal, which is being partly funded by Oracle co-founder Larry Ellison and venture capital firm Andreessen Horowitz.



The San Francisco-headquartered social media company said in the filing that it had 229 million users in the first quarter who were served advertising.



On Tuesday,&nbsp;<a href="https://www.cnbc.com/2022/05/10/elon-musk-says-he-would-lift-twitter-ban-on-donald-trump-after-deal-closes.html">Musk said</a>&nbsp;that he would lift Twitter’s ban on former President&nbsp;<a href="https://www.cnbc.com/donald-trump/">Donald Trump</a>&nbsp;if he takes over the company.



“Permanent bans should be extremely rare and really reserved for accounts that are bots, or scam, spam accounts … I do think it was not correct to ban Donald Trump,” Musk said at&nbsp;<a href="https://www.ft.com/content/50d2861e-fdeb-487c-b052-f2021558e87d" target="_blank" rel="noreferrer noopener">FT Live’s Future of the Car conference</a>. “I think that was a mistake, because it alienated a large part of the country and did not ultimately result in Donald Trump not having a voice.”



Earlier this month,&nbsp;<a href="https://www.cnbc.com/2022/05/05/bill-gates-says-elon-musk-could-make-twitter-worse.html">Bill Gates warned</a>&nbsp;that Musk could make&nbsp;Twitter&nbsp;“worse.” Speaking at The Wall Street Journal’s CEO Summit, Gates said it’s unclear how Musk will change Twitter if he takes ownership, while also raising concerns about the spread of misinformation on social media platforms.



Gates went on to question what Musk’s goal is with Twitter and whether his drive to promote free speech is sensible. “What are his goals for what it ends up being? Does that match this idea of less extreme falsehoods spreading so quickly [and] weird conspiracy theories? Does he share that goal or not?” Gates said.



Before Musk made his bid to buy Twitter outright, he&nbsp;<a href="https://www.cnbc.com/2022/04/04/elon-musk-thumbs-his-nose-at-the-sec-again-with-twitter-stake.html">failed to disclose</a>&nbsp;a more than 9% stake in the company within the SEC’s mandatory 10-day window.



<a href="https://www.theinformation.com/articles/elon-musks-early-twitter-purchase-under-ftc-scrutiny" target="_blank" rel="noreferrer noopener">The Information reported</a>&nbsp;that the Federal Trade Commission is probing the timing of Musk’s disclosure.&nbsp;<a href="https://www.bloomberg.com/news/articles/2022-05-05/musk-faces-ftc-antitrust-review-on-twitter-alongside-stock-probe" target="_blank" rel="noreferrer noopener">Bloomberg later said</a>&nbsp;the FTC is separately reviewing the acquisition itself, though many experts don’t expect the deal to raise antitrust concerns.



The FTC doesn’t disclose ongoing investigations, and an FTC spokesperson declined to comment.



Tesla’s share price climbed nearly 7% in premarket trading Friday.



Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said some are likely to query whether fake accounts are the real reason behind this delaying tactic.



“The $44 billion price tag is huge, and it may be a strategy to row back on the amount he is prepared to pay to acquire the platform,” she said in a statement.



Additional reporting by CNBC’s Lauren Feiner.

Elon Musk At SpaceX Headquarters

Elon Musk says Twitter deal on hold pending details on fake accounts; shares sink 11%

JOHANNESBURG, May 13 (Reuters)&nbsp;&#8211;&nbsp;South African mobile operator MTN Group&nbsp;MTNJ.J&nbsp;said on Friday first quarter pretax profit rose 21.1% year-on-year, supported by service revenue growth amid demand for data and financial services.



MTN, with 276 million customers in 19 countries across Africa and the Middle East, said service revenue came in ahead of its medium-term target, growing by 15.9% year-on-year to 45.8 billion rand ($2.86 billion).



That was supported by a 37.3% increase in data revenue, with growth in data usage and active data users of 45.4% and 13.1%, respectively.



Fintech revenue grew 21.2% as active monthly users of mobile money services climbed 25.9% year-on-year and volumes processed by its fintech platform rose 32.5% to 2.9 billion transactions. The value of transactions increased 12.6% to $59.9 billion.



After its Nigerian fintech subsidiary received final approval for a mobile money licence last month, MTN is planning to commercially launch its mobile money payment service in Africa&#8217;s most populous country before the end of the second quarter, group Chief Executive Officer Ralph Mupita said.



Mobile phone operators like MTN have been pushing into financial services on the continent, where a large part of the population does not have good access to traditional banking services.



($1 = 15.9969 rand)



(Reporting by Nqobile DludlaEditing by Mark Potter)

800px-MTN_Mobile_south_africa_shop

South Africa’s MTN first-quarter pretax profit up 21%

By Nelson Banya



May 12 (Reuters)&nbsp;&#8211;&nbsp;South African sugar producer Tongaat Hulett Ltd&#8217;s&nbsp;TONJ.J&nbsp;Zimbabwean subsidiaries have suspended advance payments for cane deliveries after the Harare authorities told banks to stop lending, the company said on Thursday, exposing farmers to possible cashflow problems.



Tongaat Hulett&#8217;s two Zimbabwe subsidiaries, the 50.3%-controlled Hippo Valley Estates Ltd&nbsp;HIPO.ZI&nbsp;and the wholly-owned Triangle Limited operate the only sugar mills in the country, with private growers &#8211; mostly smallholder farmers &#8211; contributing about 40% of the total sugar cane milled.



Tongaat Hulett group spokesperson Virginia Horsley told Reuters that, although farmers were due full payment for their sugar cane only after the processed sugar is sold, the company has made advance payments to growers to help provide them with working capital.



&#8220;Tongaat Hulett has traditionally agreed to utilise its borrowing facilities with banks to advance payments to farmers, on a cost recovery basis,&#8221; Horsley said.



&#8220;Tongaat Hulett is only able to advance these payments if it is able to access lending facilities and following the recent monetary measures announced, farmers were notified that advances would be suspended.&#8221;



Zimbabwe&#8217;s government on Saturday ordered the suspension of all bank lending with immediate effect, saying the aim was to stop speculation against the Zimbabwean dollar, which has been rapidly devalued on a thriving black market.&nbsp;<a href="https://www.reutersconnect.com/all?search=all%3AL5N2WZ0LR&amp;linkedFromStory=true" target="_blank" rel="noreferrer noopener">Read full story</a>



Analysts and business organisations have said the government&#8217;s lending freeze could worsen the country&#8217;s economic crisis.



On Thursday, the country&#8217;s leading dairy processor, Dairibord Holdings Ltd&nbsp;DZL.ZI, said it had cancelled a scheduled dividend payment to conserve cash.



&#8220;The changes in the financial operating environment and resultant uncertainty have significantly disrupted the credit markets,&#8221; Dairibord said in a notice posted on the Zimbabwe Stock Exchange website.



&#8220;This caused the company to revise the announced dividend position supported with the need to preserve working capital for the company.&#8221;



(Reporting by Nelson Banya; editing by Barbara Lewis)

Zimbabwe tightens coronavirus lockdown in capital Harare as cases hit 203

Tongaat Hulett suspends Zimbabwe sugar cane pre-payments over lending freeze

By Vuyani Ndaba



JOHANNESBURG, May 13 (Reuters)&nbsp;&#8211;&nbsp;South Africa&#8217;s Reserve Bank is set to make its first 50 basis point hike to its repo rate in more than six years next week, taking it to 4.75%, to prevent potential second-round effects from higher consumer prices, a Reuters poll forecast on Friday.



Despite a cost of living crisis expected to have a severe impact on growth, 16 of 24 economists in the May 9-12 survey concluded the central bank would raise its repo rate by 50 basis points (bps) on May 19. The remaining eight opted for a 25 bps increase.



Last month only four of 17 economists thought a 50 bps hike was likely, against 13 who said 25 basis points.



A median of 16 economists showed an almost 60% probability the SARB would hike interest rates by 50 bps this month.



&#8220;We expect the SARB to step up the pace of policy normalisation in its May MPC meeting, delivering a 50 bps rate hike to 4.75%,&#8221; said Jeffrey Schultz, economist at BNP Paribas.



The Reserve Bank has not used 50 bps hikes in its policy toolkit since January 2016. It was the norm prior to the 2008/09 global recession.



Still, the Bank was expected to return to 25 bps hikes in every quarter until 6.00% was reached in the third quarter of next year.



Schultz added there were growing concerns over materialising upside risks to inflation &#8211; both core and non-core &#8211; a weaker currency and what was likely to be a faster frontloading of U.S. Federal Reserve hikes over coming months.



The poll suggested inflation would average 5.9% this year and slow to 4.7% next year, slightly higher than last month&#8217;s 5.7% and 4.6% respective forecasts.



Any further upward revision could breach the SARB&#8217;s 3-6% upper comfort level for 2022.



Some governments have responded to rising prices by cutting fuel taxes or granting subsidies.



In South Africa, the temporary cut to the fuel levy by 1.50 rand ($0.0924) per litre of petrol will come to an end late this month, setting the scene for much higher fuel price increases at gas stations next month.



Independent economist Elize Kruger said the sheer extent of such a hefty fuel price increase in a single month would result in a higher probability of a severe indirect negative effect on prices (second round effects) as every product that has to be transported would become more expensive.



&#8220;Workers will demand higher wages to compensate for higher living costs, also adding to the production costs in the economy and in this process prices in most of the CPI basket will show increases. The SARB would be very uncomfortable if second round effects start to appear in a meaningful way,&#8221; said Kruger.



South African economic growth was expected to slow to 1.8% this year from a 4.9% expansion last year and stay at that rate across the forecast horizon.



Ten of 14 economists expected a &#8220;severe impact&#8221; from the cost of living crisis on economic growth this year, while the other four suggested a &#8220;mild effect&#8221; owing to the Reserve Bank&#8217;s credibility in monetary policy.



Apart from rising prices across the world, South Africans have had to deal with rotational power disruptions that constrain growth in Africa&#8217;s most developed economy and undermine job creation. ($1 = 16.2372 rand)



(Reporting by Vuyani Ndaba; Editing by Alex Richardson)

South African Reserve Bank Rate Announcement Ahead Of Stimulus Plan

S.Africa’s central bank to hike by 50bps on May 19 for first time since 2016

WINDHOEK, May 12 (Reuters)&nbsp;&#8211;&nbsp;Namibia on Thursday launched a sovereign wealth fund, months after oil discoveries by TotalEnergies&nbsp;TTEF.PA&nbsp;and Shell&nbsp;SHEL.L&nbsp;off its coast.



President Hage Geingob said at the launch the Welwitschia Fund would get an initial injection of 262 million Namibian dollars ($16.15 million) and invest 2.5% of its portfolio locally to bridge the country&#8217;s infrastructure financing gap.



The fund will collect some of the royalties from all mineral resources sold as well as some tax revenues and money raised by the government divesting from its investment holdings.



&#8220;We are looking forward to the prospects and opportunities that will emanate from the recent discoveries of oil and the green hydrogen energy, which have the potential to further boost the fund&#8217;s capital,&#8221; Geingob said.



Other resource-rich African countries that have sovereign funds include Angola, Botswana, Libya and Nigeria.



TotalEnergies said in February its Venus prospect offshore Namibia had found a good quality reservoir, which one source told Reuters was more than 1 billion barrels of oil equivalent. That find was the second major discovery in a month after Shell also announced a significant find.&nbsp;<a href="https://www.reutersconnect.com/all?search=all%3AL1N2UZ0ND&amp;linkedFromStory=true" target="_blank" rel="noreferrer noopener">Read full story</a>



Known for its gem-quality diamonds, gold and uranium, Namibia has considered creating a sovereign fund since 2009.



It is aiming to become a green hydrogen player by 2026 and has selected a preferred bidder for a multi-billion dollar project.



($1 = 16.2180 Namibian dollars)



(Reporting by Nyasha Nyaungwa, Editing by Alexander Winning and Angus MacSwan)

shutterstock_415273159

Namibia launches sovereign wealth fund following oil discoveries

EM FX, stocks down amid broader risk-off



Indian rupee at record low; inflation data due 1200 GMT



Yuan at 20-month low



Czech crown bounces from eight-week lows



S. Africa gold, mining March data due 0930 GMT



By Anisha Sircar



May 12 (Reuters)&nbsp;&#8211;&nbsp;Emerging market currencies slipped on Thursday as the greenback hit its highest&nbsp;level in two decades&nbsp;after hotter U.S. inflation data, while regional shares tumbled to&nbsp;fresh 22-month lows on pressure from&nbsp;stock markets in India and China.



MSCI&#8217;s index of emerging market (EM) currencies&nbsp;.MIEM00000CUS&nbsp;resumed a descent that began in&nbsp;early-April, falling 0.6% to return to its weakest level since November 2020 after a breather in its last two sessions.



Inflation pressures in parts of EM are rising, even though U.S. inflation might have peaked, said Natalia Gurushina, EM Fixed Income economist at VanEck.



Data on Wednesday&nbsp;showed U.S. consumer price growth is likely to stay hot for a while. Higher-than-expected inflation lifted&nbsp;the dollar&nbsp;=USD&nbsp;and dragged stocks as it suggests a more robust Federal Reserve response this year.&nbsp;<a href="https://www.reutersconnect.com/all?search=all%3AL2N2X315F&amp;linkedFromStory=true" target="_blank" rel="noreferrer noopener">Read full story</a>



&#8220;Some EM central banks will have to keep on hiking – in a sense &#8216;matching&#8217; the Fed&#8217;s hikes – even though EM inflation is driven by exogenous factors, but the problem is that global supply shocks are feeding into core inflation, and this passthrough might be higher than in normal pre-COVID years,&#8221; Gurushina added.



Stocks&nbsp;.MSCIEF&nbsp;plunged 2.3% to a 22-month low, dropping eight out of its nine previous sessions.



Indian shares&nbsp;.NSEI,&nbsp;.BSESN&nbsp;dropped nearly 2% and the rupee&nbsp;INR=IN&nbsp;hit an all-time low for a second time this week ahead of domestic retail inflation numbers, with a Reuters poll expecting it to surge to an 18-month high.&nbsp;<a href="https://www.reutersconnect.com/all?search=all%3AL3N2X40XW&amp;linkedFromStory=true" target="_blank" rel="noreferrer noopener">Read full story</a><a href="https://www.reutersconnect.com/all?search=all%3AL3N2WY21A&amp;linkedFromStory=true" target="_blank" rel="noreferrer noopener">Read full story</a>



China stocks&nbsp;.SSEC,&nbsp;.CSI300&nbsp;pared gains to close upto 0.4% lower, while the yuan&nbsp;CNY=&nbsp;slipped 0.9% to a 20-month low.



The South African rand&nbsp;ZAR=&nbsp;fell 0.8%, ahead&nbsp;of mining data and after new COVID-19&nbsp;cases crossed 10,000 for first time since January, stoking fears of a fifth wave.&nbsp;<a href="https://www.reutersconnect.com/all?search=all%3AJ8N2WE008&amp;linkedFromStory=true" target="_blank" rel="noreferrer noopener">Read full story</a>



In Central Europe, the Czech crown&nbsp;EURCZK=&nbsp;bounced 0.2% a day after plumbing two-month lows after Czech Republic President Milos Zeman appointed Ales Michl, a central bank board member who has opposed policy tightening, as the bank&#8217;s new governor, signalling a likely end to rate hikes.&nbsp;CEE/



For GRAPHIC on emerging market FX performance in 2022, see&nbsp;<a href="http://tmsnrt.rs/2egbfVh" target="_blank" rel="noreferrer noopener">http://tmsnrt.rs/2egbfVh</a>



For GRAPHIC on MSCI emerging index performance in 2022, see&nbsp;<a href="https://tmsnrt.rs/2OusNdX" target="_blank" rel="noreferrer noopener">https://tmsnrt.rs/2OusNdX</a>



For TOP NEWS across emerging markets&nbsp;<a href="https://www.reutersconnect.com/all?search=all%3ATOPEMRG&amp;linkedFromStory=true" target="_blank" rel="noreferrer noopener">Read full story</a>



For CENTRAL EUROPE market report, see&nbsp;CEE/



For TURKISH market report, see&nbsp;.IS



For RUSSIAN market report, see&nbsp;RU/RUB



(Reporting by Anisha Sircar and Lisa Pauline Mattackal in Bengaluru; editing by Uttaresh.V)

EMERGING MARKETS – FX returns to 18-month lows as dollar gallops higher

Bitcoin dropped below the $27,000 level as a recent sell-off in the cryptocurrency space continues.



The price of&nbsp;<a href="https://www.cnbc.com/quotes/BTC.CM=">bitcoin</a>&nbsp;was last down 8.76% to $26,848.20 as of 1:47 a.m. ET Thursday, according to data from Coin Metrics.&nbsp;<a href="https://www.cnbc.com/quotes/ETH.CM=">Ether</a>&nbsp;fell more than 13% to $1,832.33.



Cryptocurrencies fell with stocks after the Bureau of Labor Statistics reported consumer prices for the month of April&nbsp;<a href="https://www.cnbc.com/2022/05/11/cpi-april-2022.html">jumped 8.3%, which was slightly higher than expected</a>&nbsp;by economists polled by Dow Jones.



That spooked investors, leading them to exit risk assets including crypto. Cryptocurrencies remain highly correlated with the S&amp;P 500 and, more recently, the Nasdaq Composite.



<h2 class="wp-block-heading" id="h-bitcoin-stays-under-30-000-wednesday">Bitcoin stays under $30,000 Wednesday</h2>



“The crypto market has been under pressure for some time now,” said Michael Rinko, venture associate at AscendEx. “The Fed keeps hiking, so equities keep going down and crypto’s been going down along with it. Generally that’s created a lot of fear in the market.”



This is the second time this week bitcoin has fallen into the $29,000 range. Analysts have called $30,000 a key level for the largest cryptocurrency by market cap, and said it could fall even further if it can’t hold there.



This time last week bitcoin&nbsp;<a href="https://www.cnbc.com/2022/05/04/bitcoin-jumps-to-40000-after-fed-chair-powell-rules-out-bigger-rate-hikes.html">touched a recent high of $40,000</a>&nbsp;but quickly reversed the next day and has been steadily hitting new lows since.



Investors also digesting big news from the Terra project, whose suddenly popular stablecoin&nbsp;<a href="https://www.cnbc.com/quotes/UST.CM=">TerraUSD</a>&nbsp;crashed&nbsp;<a href="https://www.cnbc.com/2022/05/11/terra-ust-stablecoin-dives-below-1-peg-luna-cryptocurrency-down-80percent.html">almost 100% at one point</a>&nbsp;in the past week, breaking its $1 peg. The decentralized, algorithmic stablecoin is meant to be backed by a combination of digital assets, including bitcoin.

106885587-16214575182021-05-19t203912z_144465080_rc28jn9cpt2v_rtrmadp_0_crypto-currency-bitcoin

Bitcoin drops below $27,000 level as crypto sell-off continues

* Asia stocks drop to near 2yr low, U.S. equity futures struggle



* Dollar hits 2yr highs on AUD, NZD



* Bitcoin tumbling, hits new 16-month low



By Tom Westbrook



SINGAPORE, May 12 (Reuters) – Asian stocks fell to an almost two-year low and the dollar rose to multi-year highs on Thursday as data showed U.S. inflation persistently hot, deepening investor worries about the economic toll of aggressive interest rate hikes to tame it.



U.S. markets whipsawed after the news, then closed sharply lower. S&amp;P 500 futures gave up early gains to fall 0.2% in the Asia session. European futures also fell, with EuroSTOXX 50 futures down 2% and FTSE futures down 1.6%.



Bitcoin, leading a fire-sale of risky assets as rate hikes gather steam, fell 7% to $26,970. It was near $40,000 a week ago and is 60% beneath its peak six months ago.



The growth-sensitive Australian and New Zealand dollars fell about 0.8% to almost two-year lows. The Chinese yuan slid to a 19-month trough.



Headline U.S. consumer prices rose 8.3% for the 12 months to April, slower than the 8.5% pace of a month earlier, but higher than market forecasts for 8.1%. Traders said it underscored concern that rates will rise quickly in response.



“We’re now very much embedded with at least two further (U.S.) hikes of 50 basis points on the agenda. For equity markets that really is the end of free money,” said Damian Rooney, director of institutional sales at Argonaut in Perth.



“I think we probably were delusional six months ago with the rise of U.S. equities on hopes and prayers and the madness of the meme stocks, and suddenly were going a little bit back to what is reality,” he said.



MSCI’s broadest index of Asia-Pacific shares outside Japan fell 2% to a 22-month low. Japan’s Nikkei fell 1.7%.



Treasuries were steady in Asia, but selling at the short end and a rally at the longer end has flattened the yield curve as investors brace for near-term hikes to hurt long-run growth.



The benchmark 10-year Treasury yield fell six basis points (bps) overnight and dropped a further 2.6 bps in Tokyo trade to 2.8967%. The gap between two-year and 10-year yields narrowed 3.5 bps.



“There should be a tipping point in how far the Fed can be pressed before odds clearly point towards a hard landing,” said NatWest Markets’ U.S. rates strategist Jan Nevruzi.



SELL IN MAY



The rates outlook is driving up the U.S. dollar and taking the heaviest toll on riskier assets that shot up through two years of stimulus and low-rate lending.



The Nasdaq is down nearly 8% in May so far and more than 25% this year. Hong Kong’s Hang Seng Tech index slid 1.5% on Thursday and is off more than 30% this year.



Cryptocurrency markets are also melting down, with the collapse of the so-called stablecoin TerraUSD highlighting the turmoil as well as the selling in bitcoin and next-biggest-crypto, ether.



A weakening growth picture outside the United States is battering investor confidence, too, as war in Ukraine threatens an energy crisis in Europe and lengthening COVID-19 lockdowns in China throw another spanner into supply chain chaos.



Nomura estimated this week that 41 Chinese cities are in full or partial lockdowns, making up 30% of the country’s GDP.



Property developer Sunac China said it missed a bond interest payment and will miss more as China’s real estate sector remains in the grip of a credit crunch.



The yuan fell to a 19-month low of 6.7631 and has dropped almost 6% in under a month.



The Australian dollar fell 0.8% to a near two-year low of $0.6879. The kiwi slid by a similar margin to $0.6240, though the euro and yen held steady to keep the dollar index just shy of a two-decade peak.



Sterling was at a two-year low of $1.2204.



In commodity trade, oil wound back a bit of Wednesday’s surge as growth worries dampened fear of gas supply disruptions in Europe.



Brent crude futures fell 1.3% to $106.90 a barrel.



British activity and growth data is due later in the day.



(Editing by Muralikumar Anantharaman and Kim Coghill)

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Nigeria’s accountant general faces corruption charges after arrest