Weekly Global Market Summary Highlights: February 14-18, 2022

All major US and European equity indices closed lower on the
week, while APAC markets were mixed. US government bonds were
almost flat on the week, while all benchmark European bonds were
higher week-over-week. European iTraxx was wider on the week across
IG and high yield, while CDX-NA was almost unchanged
week-over-week. Gold, silver, copper, and natural gas closed higher
on the week, the US dollar was flat, and oil was lower


All major US equity indices closed lower on the week; Russell
2000 -1.0%, S&P 500 -1.6%, Nasdaq -1.8%, and DJIA -1.9%

10yr US govt bonds closed 1.93% yield and 30yr bonds 2.24%
yield, which is -1bp and flat week-over-week, respectively.

DXY US dollar index closed 96.04 (flat WoW).

Gold closed $1,900 per troy oz (+3.1% WoW), silver closed $23.99
per troy oz (+2.7% WoW), and copper closed $4.52 per pound (+0.3%

Crude Oil closed $90.21 per barrel (-3.1% WoW) and natural gas
closed $4.43 per mmbtu (+12.4% WoW).

CDX-NAIG closed 69bps and CDX-NAHY 370bps, which is +1bp and
flat week-over-week, respectively.


All major European equity indices closed lower on the week;
France -1.2%, Italy -1.7%, UK -1.9%, Spain -2.4%, and Germany -2.5%

All major 10yr European government bonds closed higher on the
week; UK closed -16bps, Germany -11bps, Italy -11bps, France -7bps,
and Spain -1bps week-over-week.

Brent Crude closed $93.54 per barrel (-1.0% WoW).

iTraxx-Europe closed 70bps and iTraxx-Xover 341bps, which is
+3bps and +17bps week-over-week, respectively.


Major APAC equity indices closed mixed on the week; Mainland
China +0.8%, Australia +0.1%, South Korea -0.1%, India -0.6%, Japan
-2.1%, and Hong Kong -2.3% week-over-week.

Monday, February 14, 2022

  1. Global orange production for 2021/22 is estimated up 1.4
    million tons from the previous year to 48.8 million tons as
    favorable weather leads to larger crops in Brazil, Mexico, and
    Turkey, according to a recent USDA report (January 2022). These
    gains more than offset lower production in Egypt, the EU, and the
    US. Most of the higher production is expected to go into fruit for
    processing. (IHS Markit Food and Agricultural Commodities’ Hope Lee)

    • Brazil’s production is forecast up 1.8 million tons to 16.5
      million; favorable weather during flowering improved fruit set.
      Consumption is up slightly while fruit for processing is forecast
      up 16%, accounting for the majority of the increase in available
    • China’s production is projected up slightly to a record 7.6
      million tons. The forecast is based on higher output in new navel
      planting areas in Jiangxi and higher yields in Hubei and Hunan
      provinces, offsetting decreases in southern Jiangxi province where
      citrus greening disease has affected crops for several years.
      Consumption and exports are forecast up with the higher production
      while imports are down.
    • US production is forecast to drop 11% to a near record low 3.6
      million tons due to poor fruit set in California and the continued
      decline in area and yields as a result of citrus greening in
      Florida. Consumption, exports, and fruit for processing are all
      lower with the drop in production, while imports are projected to
      be flat due to weak consumer demand.
    • EU production is expected to decline 6% to 6.1 million tons due
      to unfavorable weather and a slight drop in area harvested. Fresh
      consumption, fruit for processing, and exports are down with the
      lower supplies. Imports are projected up with the drop in
    • Egypt’s production is forecast to drop by almost 16% to 3.0
      million tons due to unfavorable weather during flowering which
      reduced fruit set. Consumption is forecast lower due to the reduced
      production. Exports are forecast down due to lower supplies, but a
      greater share of supply is expected to go towards exports (less to
      domestic consumption) given high global demand for the fruit.
    • South Africa’s production is forecast to increase 3% to 1.7
      million tons (the highest level in eight years) due to favorable
      weather and a rise in area. Consumption and exports are up with the
      rise in production as well as strong demand. The EU is expected to
      remain the top market, accounting for over 40% of shipments
    • Turkey’s production is forecast to rise 40% to 1.8 million tons
      due to favorable weather and higher area and yields. Consumption
      and exports are up as a result of the increased supplies.
  2. US-based recycler Evergreen expects to increase its recycled
    polyethylene terephthalate (rPET) production rate by around 48% in
    June when it completes upgrades in its facility in Clyde, Ohio, the
    company said last week. Evergreen said the expansion adds four
    high-volume, food grade rPET manufacturing lines to its arsenal,
    boosting its production capacity from an existing 147 million
    pounds (66,678 mt/yr) to 217 million pounds (98,429 mt/yr) when
    complete in June 2022. (IHS Markit Chemical Market Advisory
    Service’s Chuan Ong)

    • The company plans to increase plastics recycling rates, and to
      convert more companies to rPET from virgin PET resin, Evergreen
    • Evergreen cited a report noting a 10% increase in end-use rPET
      demand in 2020, with the food and beverage category fastest
      growing, rising 36% from 2019 to 2020.
    • According to Evergreen’s partner and investor, trade
      organization American Beverage, America’s beverage companies are
      designing bottles to be 100% recyclable, so they can be remade into
      new bottles, reducing the use of new plastic.
    • Evergreen said it processes 11.6 billion post-consumer bottles
      annually, and is one of North America’s Top 3 PET recyclers and
      producer of rPET.
    • The company’s production base mushroomed from one to four
      within a single year in 2021 – besides its original facility in
      Clyde, Ohio, it gained capacities in Albany, New York, Amherst in
      Canada’s Nova Scotia, and Riverside, California.
    • Its Evergreen Albany facility, formerly UltrePET, and Evergreen
      Amherst, formerly Novapet) were acquired from wTe Corp. in November
      2021. Evergreen Riverside was acquired from CarbonLite in May 2021.
      As a result, Evergreen’s annual rPET capacity ballooned by 367%,
      adding 107 million pounds (48,534 mt/yr), additional to the 40
      million pounds (18,143 mt/yr) capacity before.
    • Paraxylene (PX) is the main feedstock of purified terephthalic
      acid (PTA). PTA is, in turn, a key raw material for virgin PET.
      Both PTA and PX are unnecessary in the recycling and production of
  3. The European Systemic Risk Board (ESRB) published five warnings
    and two recommendations on medium-term residential real estate
    (RRE) vulnerabilities on 11 February. The ESRB has a mandate to
    issue warnings when significant systemic risks are identified and
    to make recommendations for remedial action. Warnings were issued
    to Bulgaria, Croatia, Hungary, Liechtenstein, and Slovakia for
    failing to sufficiently address newly identified RRE-related
    vulnerabilities. Moreover, recommendations were sent to competent
    authorities in Germany and Austria, as both countries were
    previously identified as having vulnerabilities, which “have not
    been addressed sufficiently”. The ESRB has confirmed that
    authorities in Germany and Austria have since announced measures to
    address the vulnerabilities in the RRE sector. (IHS Markit Banking
    Risk’s Natasha
    McSwiggan and Pedram Moezzi)

    • In Bulgaria, the key vulnerabilities identified are elevated
      house price growth, signs of house price overvaluation, and high
      mortgage credit growth. Although household indebtedness is
      relatively low as reflected by a household debt-to-GDP ratio of 24%
      in 2020, 98% of loans are at variable rates, exposing households to
      potential interest rate changes.
    • Croatia displayed the same vulnerabilities as Bulgaria, plus
      the additional signs of loosening credit standards. The latter is
      confirmed by results of the Croatian National Bank (CNB)’s
      fourth-quarter 2021 lending survey. However, the ESRB has noted
      that “the quality of the data on lending standards should be
      ensured as promptly as possible”.
    • Hungary has similar vulnerabilities with a focus on house price
      and mortgage credit growth. The housing market in Hungary is
      characterized as suffering from a supply shortage, further fueling
      the growth in house prices. A combination of measures has been
      utilized by the authorities, such as preferential value-added tax
      for new constructions and “partially sufficient” macroprudential
      measures to dampen housing demand and price growth. Real estate and
      construction-purpose credit growth was the fastest growing sector,
      at 19.5% y/y in the third quarter of 2021.
    • Slovakia’s vulnerabilities are confined to house price growth,
      house price overvaluation, and mortgage credit growth. However, it
      has both the highest and second-highest growth rates for mortgage
      credit growth and house price growth in the EU, respectively.
      Credit growth in the household sector reached 8.3% y/y in the third
      quarter of 2021, compared with 5.9% y/y for total banking-sector
      loans, in the same period.
  4. In 2021 as a whole, Turkish industrial production increased by
    16.4% according to data from the Turkish Statistical Institute
    (TurkStat). Driven by rising external demand and easy credit to
    finance increased production, growth was particularly strong
    following two years of sluggish gains. (IHS Markit Economist Andrew

    • Despite waning export demand and growing supply problems,
      industrial activity continued to expand throughout the final
      quarter of the year. In each of the months October, November and
      December, monthly production continued to grow in seasonally and
      calendar adjusted terms according to data from TurkStat, rising by
      1.6% month on month (m/m) in the final month of the year.
    • Both for the year as a whole and over the final quarter, the
      production of capital goods – including base metals – grew
      particularly fast, pacing overall industrial output. Meanwhile, the
      once vibrant automotive sector posted below-average performance
      both for 2021 as a whole and during the final months of the
    • TurkStat also reported a downturn of retail trade activity in
      December. In seasonally and calendar adjusted terms, total retail
      trade in volume terms dipped by 2.7% m/m in December, a sharp
      turnaround from the preceding six months. Surging inflation
      severely undermined purchasing power.
  5. Volvo Trucks plans to launch a large-size electrified truck in
    South Korea in 2023, in a bid to strengthen its position in the
    country’s imported truck market, reports the Yonhap News Agency.
    “The domestic large truck market is expected to recover to 10,000
    units this year, and demand for trucks will improve going forward,”
    said Volvo Trucks Korea president Park Gang-serk. The truck maker
    sold 2,000 trucks in South Korea last year, accounting for 40% of
    the imported truck market. It aims to raise the ratio to 50% in
    2025. Volvo Trucks entered the South Korean market in 1996, and its
    total sales in the country are expected to exceed 30,000 units
    during the first half of this year. It aims to achieve 40,000 in
    cumulative sales, or a market share of 50%, by 2025, highlights the
    report. Volvo Trucks’s electric vehicle (EV) plans for South Korea
    are also in line with growing demand for alternative-powertrain
    vehicles in the country, thanks to positive demand for new models,
    as well as favorable policies and infrastructure initiatives by the
    government. (IHS Markit AutoIntelligence’s Jamal Amir)
  6. The Dubai Road Transport Authority (RTA) will begin trials of
    digital maps required for deploying autonomous vehicles (AVs)
    developed by Cruise Automation by the end of 2022. RTA had a
    discussion with a delegation from Cruise on the latest developments
    relating to the agreement signed between the two entities for
    operating Cruise AVs in providing taxi and e-hailing services. A
    limited number of Cruise AVs will be deployed in 2023, with plans
    to progressively raise the number of deployed vehicles to 4,000 by
    2030. Mattar Al Tayer, director-general and chairman of the board
    of executive directors of RTA, said, “The operation of autonomous
    vehicles contributes to the integration of transport systems by
    easing the mobility of public transport riders and helping them
    reach their final destinations. It fits well with RTA’s first and
    last-mile strategy approved last year relating to the first and
    last sectors of journeys from and to the nearest public transport
    points. It consists of two sections: groups and individuals”,
    reports Gulf News. (IHS Markit Automotive Mobility’s Surabhi

Tuesday, February 15, 2022

  1. US producer prices for final demand spiked up 1.0% in January
    and rose 9.7% from a year earlier. The December gain was revised
    higher. Energy goods climbed by 2.5% to more than reverse the
    Omicron-inspired December drop. Food prices climbed by 1.6%, also
    reversing a December dip. Core goods prices rose 0.8% and were 9.4%
    above 12 months earlier. (IHS Markit Economist Mike Montgomery)

    • Final demand prices for services grew 0.7% in January. Retail
      and wholesale trade margins climbed by 0.6%. Transportation and
      warehousing prices were unchanged as air fares fell by 4.2% after
      climbing a total of 9.0% in the prior two months. The other
      services complex scored a 0.9% gain on a broad-based advance.
    • The producer price report was, in a word, “ugly,” but global
      supply chain woes and past fiscal and monetary stimulus have
      produced other ugly inflation reports. Indeed, the year-over-year
      increases for the three most common measures (finished goods,
      excluding food and energy, and also excluding trade) were all a tad
      worse in December. The 1% handle just ramps up the fear of
      double-digit inflation.
    • Bottom line: Inflationary pressures persist and are endemic in
      the economy. There is no one source that can be whisked away, but
      instead a tangle of interconnected sources, including supply chain
      issues, the pandemic itself, and reluctant-to-work workers. It may
      not take decades to tamp down this inflation episode, but it will
      not happen overnight. The ugly number may also contribute to the
      size of the Federal Reserve’s initial inflation-fighting
  2. Japan’s real GDP rose in the fourth quarter of 2021, moving up
    1.3% quarter on quarter (q/q; or 5.4% q/q annualized) after a 0.7%
    q/q (or 2.7% q/q annualized) drop in the previous quarter.
    Full-year GDP growth increased by 1.7% year on year (y/y) in 2021
    after a 4.5% y/y decline in 2020, but the figure remains below the
    pre-pandemic levels. The major reason behind the q/q improvement
    was a rebound in private consumption, which offset declines in
    public demand and residential investment, and changes in private
    inventories. (IHS Markit Economist Harumi

    • Private consumption rose by 2.7% q/q in the fourth quarter of
      2021 following a 0.9% q/q drop in the third quarter. Easing
      COVID-19 containment measures drove spending in services (up 3.5%
      q/q). Improved supply of autos thanks to the softer negative
      effects of shortages of semiconductors and parts led to a solid
      rebound in spending on durable goods (up 9.7% q/q).
    • Increases in private capital expenditure (capex) and net
      exports also contributed to the q/q growth. Despite the improvement
      in auto production in the quarter, relatively modest rebounds of
      capex (up 0.4% q/q) and exports of goods and services (up 1.0% q/q)
      reflected the negative effects of supply chain constraints on
      production for a broad range of capital goods and softer external
      demand because of the spread of the Omicron variant. The
      improvement in net exports also stemmed from weak imports,
      partially reflecting declines in imports of COVID-19 vaccines in
      line with the progress in vaccine rollout.
    • While easing COVID-19 containment measures contributed to the
      resumption of economic activity, residential investment remained in
      slump in the fourth quarter (down 0.9% q/q following a 1.6% q/q
      drop in the previous quarter), reflecting higher material prices.
      That also made it difficult for progress with public investment
      (down 3.3% q/q for the fourth consecutive quarter of decline) to
      meet budgets for infrastructure projects.
    • Despite reports on industrial production suggesting increases
      in producers’ inventories in the quarter for rebuilding stocks,
      changes in private inventories unexpectedly declined and had a
      0.1-percentage-point negative contribution to q/q real GDP growth.
      The Cabinet Office estimates that work-in-process inventory
  3. China’s Ministry of Industry and Information Technology (MIIT)
    on 10 February published draft revisions to the country’s data
    security regulation. An earlier version was published on 30
    September 2021 for public commentary. The revisions seek to
    supplement China’s Data Security Law – implemented on 1 September
    2021 – which regulates all forms of data management such as
    collection, storage, processing, transfer, and disclosure across
    several industrial sectors. The September 2021 draft introduced a
    three-tier data classification mechanism based on perceived risk
    towards national security with “ordinary”, “important”, and “core
    data” categories. The revisions would also remove the requirement
    that core data are banned from being transferred abroad. However,
    the revisions specify that MIIT approval must be sought when
    sending “industrial, telecommunications or wireless radio” data
    abroad. Furthermore, data owners have a legal responsibility to
    report any “significant change” in data size or content for the
    important or core categories, or data that are determined to have
    an impact on China’s political, territorial, military, economic,
    technological, digital, or ecological resources, or nuclear
    security stability. Although it is implied that important and core
    data are in principle allowed to be transferred abroad, companies
    handling these data categories are likely to be subject to more
    stringent review processes over potential national security
    concerns. The proposed revisions specify that local
    industry-specific regulators are responsible for the supervision of
    data management, effectively giving local government departments
    and regulatory authorities – particularly local-level MIIT and
    Cyberspace Administration offices – additional political power to
    govern data flow. In particular, the latest update remains vague
    about what types of data will be considered “important”, thus
    increasing the discretionary power of local authorities. (IHS
    Markit Country Risk’s David
  4. Ford is evaluating the possibility of manufacturing electric
    vehicles (EVs) at one of its plants in India for export, reports
    Reuters. Kapil Sharma, director of communications at Ford India,
    has stated that the company is looking into restarting its India
    operations under the Production-Linked Incentive (PLI) scheme and
    has submitted a proposal to the Indian government. “We thank the
    Indian government for approving Ford’s proposal under the PLI
    scheme for the automobile sector. As Ford leads customers through
    the global electric vehicle revolution, we’re exploring the
    possibility of using a plant in India as an export base for EV
    manufacturing”, said Sharma. The automaker has not revealed which
    of the two plants it intends to retain to build EVs. The latest
    move will mark a return for Ford as the automaker announced in
    September last year that it has ceased manufacturing vehicles in
    the country because of accumulated losses of over USD2 billion in
    the last 10 years. (IHS Markit AutoIntelligence’s Isha Sharma)
  5. Chinese authorities will push for the expansion of the
    country’s electric vehicle (EV) charging infrastructure in the next
    few years to meet demand for 20 million EVs on the road by 2025.
    According to gasgoo citing a statement issued by several Chinese
    governmental departments including the National Development and
    Reform Commission (NDRC), China will improve the public charging
    network in central urban areas, boost the construction of public
    charging facilities in peripheral urban areas, and deploy battery
    swapping stations based on local conditions of different regions.
    The authorities also urged the housing department to introduce
    regulations to facilitate the installation of EV chargers in
    residential buildings. (IHS Markit AutoIntelligence’s Abby Chun
  6. Ørsted has completed the divestment of 50% stake in the 900MW
    Borkum Riffgrund 3 project off Germany to Glennmont Partners. This
    is the Ørsted’s first farm-down to an institutional investor signed
    prior to taking a final investment decision. The transaction, which
    includes a commitment to fund 50% share of the payments under an
    EPC contract for the entire wind farm, is valued at approximately
    USD1.4 billion. As part of the agreement, Ørsted will construct the
    wind farm under a full-scope EPC contract, perform operations and
    maintenance services for 20 years, and provide a route to market
    for the power and green certificates generated by Borkum Riffgrund
    3. Borkum Riffgrund 3 will feature Siemens Gamesa 11MW offshore
    wind turbines. Project commissioning is expected by 2025. (IHS
    Markit Upstream Costs and Technology’s Chloe
  7. Canadian dairy giant Saputo has announced plans to streamline
    its manufacturing footprint in the US and international markets,
    while also optimizing and modernizing its manufacturing base. (IHS
    Markit Food and Agricultural Commodities’ Vladimir Pekic)

    • The company stated it plans to invest CDN169 million ($133
      million) towards the modernization and expansion of its cheese
      manufacturing facilities in Wisconsin and California. These
      initiatives will begin in the fourth quarter of fiscal 2022 and are
      expected to take approximately 24 months to implement. Furthermore,
      Saputo intends to close its Bardsley Street, Tulare, California,
      facility in fiscal 2023.
    • In the international sector, the company will be streamlining
      operations in two of its manufacturing facilities in
    • The capital investments and consolidation initiatives are
      expected to result in annual savings and benefits gradually,
      beginning in fiscal 2023, and reaching approximately $112 million
      ($83 million after tax) by the end of fiscal 2025. Costs connected
      with the capital investments and consolidation initiatives will be
      approximately $46 million after tax.
    • Saputo’s third quarter revenues for the fiscal year of 2022,
      which ended on 31 December, increased 3.7% y/y to CDN3.9 billion.
      Adjusted EBITDA amounted to CDN322 million, down CDN109 million or
      25.3% y/y.
    • The company warned that challenging market conditions,
      including labor shortages, supply chain disruptions, and
      inflationary pressures, continued to impact its sectors to varying
      degrees, with the US sector being the most impacted.

Wednesday, February 16,

  1. The minutes of the last meeting of the Federal Open Market
    Committee (FOMC), held on 25-26 January, were released this
    afternoon (16 February). The minutes reflect widespread consensus
    that it will soon be appropriate to begin the process of removing
    monetary stimulus implemented during the pandemic, with increases
    in interest rates likely to be followed within a few months by a
    plan to begin shrinking the Federal Reserve’s securities portfolio
    primarily through run-off—that is, through limits on the
    reinvestment of principal payments. The minutes provide no clear
    signal about whether the first increase in the target for the
    federal funds rate will be the “usual” increase of 25 basis points
    or a larger increase of 50 basis points. Differences of opinion
    among policymakers about the scope for further gains in labor
    supply and about how quickly inflation might recede suggest a high
    bar for an increase of 50 basis points in March. The minutes are
    consistent with IHS Markit analysts’ expectation that rate hikes
    will be front-loaded this spring, then slow later in the year as
    inflation moderates and to allow for balance-sheet shrinkage by the
    Fed. (IHS Markit Economists Ken
    Matheny and Lawrence Nelson)
  2. US total retail trade and food services sales jumped 3.8% in
    January, a stronger reading than expected. Nonautomotive sales rose
    3.3%, while core sales rose 3.8%. (IHS Markit Economists Kathleen
    Navin and William Magee)

    • The surge in January followed a sharp decline in December, as
      news reports of supply chain issues and delays in shipping likely
      shifted sales forward into October and November. Seasonal factors,
      which anticipated a pop in December for holiday shopping and a
      reversal in January, are now playing a role in the data,
      contributing to the sharp decline in December and the jump in
    • Sales at nonstore retailers, which are particularly sensitive
      to shipping delays, help illustrate this story. These sales, which
      make up less than one-sixth of total sales, rose 14.5% on the month
      and accounted for roughly half of the increase in total retail
      trade and food services sales in January. IHS Markit analysts had
      anticipated this swing after observing the same pattern last
    • Elsewhere in today’s (16 February) report, sales for food
      services and drinking places declined 0.9% in January. The weakness
      in January was previewed by soft readings from the OpenTable data
      as would-be diners became more cautious upon Omicron concerns.
      These data have since turned up, suggesting restaurant sales will
      improve in February.
    • Meanwhile, retail sales at building materials stores continued
      to strengthen in January, with an increase of 4.1%. The strength in
      January came even as weather turned more severe.
    • While some reversal in retail sales is expected in February,
      IHS Markit analysts continue to anticipate that solid fundamentals,
      including wages and net worth, will remain supportive of consumer
      spending in the near term.
  3. Despite less stringent pandemic restrictions than the year-ago
    Spring Festival holiday supporting mild improvement in service
    prices, overall consumer demand remained weak. With the continued
    zero-COVID-19 stance amid more frequent regional outbreaks, further
    policy easing remains likely to counter the growth headwinds. (IHS
    Markit Economist Lei Yi)

    • Mainland China’s consumer price index (CPI) increased by 0.9%
      year on year (y/y) in January, down by 0.6 percentage point from
      the December 2021 reading, according to the National Bureau of
      Statistics (NBS). Month-on-month (m/m) CPI inflation came in at
      0.4%, bouncing back from the month-ago deflation of 0.3% m/m, owing
      to the seasonal demand pickup ahead of Spring Festival holiday (31
      January—6 February) as well as the recent rise in oil
    • The headline CPI disinflation, on the other hand, was again
      largely driven by the falling food prices, which recorded deflation
      of 3.8% y/y in January compared with a 1.2% y/y decline in the
      prior month. In particular, pork price deflation widened further by
      4.9 percentage points to 41.6% y/y owing to the relatively high
      base; while fresh vegetable prices slid into deflation territory,
      logging a 4.1% y/y decrease in January from the 10.6% y/y increase
      in the month before. Regarding the non-food components, service
      price inflation ticked up by 0.2 percentage point to 1.7% y/y
      thanks to eased travel restrictions ahead of the Spring Festival
      holiday than in 2021, with air ticket prices notably higher by
      20.8% y/y. Excluding the volatile food and energy components, core
      CPI inflation kept unchanged at 1.2% y/y.
    • The producer price index (PPI) rose by 9.1% y/y in January,
      lower by 1.2 percentage points from December 2021 and marking a
      third month of moderation thanks to government interventions.
      Month-on-month PPI deflation narrowed by 1.0 percentage point to
      0.2%, which was almost entirely led by the 0.2% m/m decline in the
      means of production subindex; while the PPI subindex of consumer
      goods reported no change in January.
    • By sector, coal and steel-related sectors including coal mining
      and dressing and ferrous metal smelting and pressing continued to
      register month-on-month price deflation in January. However, higher
      crude oil and nonferrous metal prices—partially contributed by
      the geopolitical tensions in Eastern Europe—led to
      month-on-month re-inflation in prices of petroleum and natural gas
      extraction as well as nonferrous metal smelting and pressing
  4. Eurozone retail sales volumes plunged by 3.0% month on month
    (m/m) in December 2021, the largest decline in eight months. The
    weakness was much more pronounced than expected, undershooting the
    market consensus expectation of a 0.5% m/m decline by some
    distance. (IHS Markit Economist Ken

    • Although retail sales in the fourth quarter of 2021 as a whole
      rose by 0.3% quarter on quarter (q/q), this was the weakest rate of
      increase for three quarters and given the December 2021 drop,
      carryover effects for sales growth in the first quarter of 2022
      will be unfavorable.
    • The eurozone trade balance swung into the red in November 2021
      for the first time in over a decade and the deficit increased
      markedly in December 2021, jumping from EUR1.8 billion to EUR9.7
      billion, the highest since July 2008 amid the global financial
    • By way of comparison, the eurozone’s monthly trade surpluses
      peaked at over EUR25 billion prior to the pandemic.
    • Eurozone exports (in value terms) fell by 0.6% m/m in December
      2021. This followed consecutive strong increases in the two prior
      months, however, meaning that in the fourth quarter of 2021 as a
      whole, exports rose by 4.2%, the highest growth rate for four
      quarters. Relative to their pre-pandemic level, exports were up by
      6.7% in December 2021.
    • Imports (again in value terms) rose by 3.1% m/m in December
      2021, the 11th straight increase, and surged by over 10% q/q in the
      fourth quarter of 2021 overall. Imports were up by over 27% in
      December 2021 relative to their pre-pandemic level.
    • Eurozone industrial production rose by a much
      stronger-than-expected 1.2% m/m in December 2021. Given the
      November 2021 initial 2.3% m/m increase (subsequently revised up to
      2.4%), the market consensus expectation had been for a modest 0.3%
      m/m gain. For the first time in five months, industrial production
      exceeded its pre-pandemic level, by 1%.
    • The breakdown of the December 2021 output data by type of goods
      showed a mixed picture, with production of capital goods
      outperforming (2.6% m/m). Production of capital goods surpassed its
      pre-pandemic level in December last year for the first time in five
      months, although it continues to lag the recovery in output of
      consumer goods.
    • Despite back-to-back strong increases, industrial production
      contracted by 0.5% q/q in the fourth quarter of 2021, the third
      consecutive q/q decline, with supply chain disruptions having
      hindered the sector since early in 2021. Carryover effects for
      growth in the first quarter of 2022 are very positive, however,
      given the very strong end to last year, while leading indicators
      have been improving in recent months.
  5. US-based upcycling start-up Novoloop has received funding that
    brings it nearer to commercializing its polyethylene (PE)-to-
    thermoplastic polyurethane (TPU) technology, the company announced
    late-Tuesday. (IHS Markit Chemical Market Advisory Service’s Chuan

    • The company said it received $11 million in Series A funding
      that will allow it to complete crucial pilot scale-ups and
      commercialize its technology.
    • Novoloop did not detail where and when it plans to construct
      pilot plants for its process.
    • The company said its proprietary process technology, termed
      ‘Accelerated Thermal Oxidative Decomposition’, is a form of
      chemical recycling that breaks down PE into chemical building
      blocks for synthesis into high-value products.
    • According to Novoloop, PE is the most widely used plastic today
      but only 9% is recycled, and virtually none is upcycled. The
      company aims to increase commercial demand for waste PE, believing
      its technology can upcycle carbon content found in common plastic
      waste like grocery bags, packaging, and agricultural plastics that
      are too low value for material recovery facilities and instead sent
      into landfills or incinerators.
    • Novoloop’s first product based on its advanced recycling
      technology is a TPU, which can be used in footwear, apparel,
      sporting goods, automotive, and electronics. The company says its
      TPU is the first made from post-consumer PE waste that matches the
      performance characteristics of virgin TPU made from petrochemicals.
      Novoloop says its TPU has a carbon footprint 46% smaller than
      conventional TPUs.
  6. The flavor and essential oil processor IFF, listed on the New
    York Exchange, has reported that it net sales reached $3.03 billion
    (+139% y/y) in Q4 2021, bringing 2021 sales to $11.65 billion, 129%
    more y/y, once the company has completed the merger with Nutrition
    & Biosciences (N&B). (IHS Markit Food and Agricultural
    Jose Gutierrez)

    • The operating profit increased by 3% y/y to $585 million.
    • Inventories totaled $2.51 billion in 2021, up from $1.13
      billion in 2020.
    • Nourish and Scent were the drivers of growth.
    • Nourish sales rose by 9% on a combined currency-neutral
      (non-GAAP) basis to $2.6 billion due to robust activity in the
      ingredients industry. Scent grew by 8% to $2.25 billion thanks to
      strong demand for fine fragrances and cosmetic actives.
    • The company projects that sales ranged between $12.3-12.7
      billion in 2022.
  7. US electric vehicle (EV) maker Fisker Inc started taking orders
    for its second product, the Pear, on 15 February, according to a
    company announcement. Fisker has begun taking reservations for the
    Pear even though it has not yet started deliveries of its first
    model, the Ocean electric sport utility vehicle (SUV). According to
    a Fisker statement, the Pear is a compact, five-passenger electric
    utility vehicle and deliveries are expected to start in 2024.
    Fisker says the Pear – standing for Personal Electric Automotive
    Revolution – will have a starting price of USD29,900 before taxes
    and incentives in the United States. This will make it one of the
    more-affordable EVs in the market and potentially making it strong
    competition for General Motors (GM)’s Chevrolet Equinox EV, which
    the automaker has not yet shown. GM has said the price of the
    Chevrolet Equinox EV will start at USD30,000, and it is due on the
    market in 2024 as well. In a statement, Fisker Inc CEO Henrik
    Fisker said, “PEAR will feature the very latest technology in a
    beautifully designed, affordable urban mobility device. It’s an
    exciting vehicle and an exciting time for the company as we expand
    our lineup.” The Pear is to be produced for Fisker by Foxconn at a
    former GM facility in Ohio (US), acquired by Foxconn through
    Lordstown Motors. Meanwhile, the upcoming Ocean is being produced
    for Fisker by Magna. Fisker states that reservations for the Pear
    can be made for USD250 for a first reservation, or USD100 for a
    second reservation. (IHS Markit AutoIntelligence’s Stephanie

Thursday, February 17,

  1. BB-rated exploration and production company constituents in the
    IHS Markit iBoxx Liquid USD High Yield debt index closed at an
    average yield of 4.96% on 16 February, which is 150bps higher than
    the all-time low yield of 3.46% on 9 November 2021 when WTI closed
    at $84.15/barrel.
  2. While the offshore wind power sector is set to attract heavy
    investment amid decarbonization efforts across the globe, one
    crucial support sector is showing strain: wind turbine installation
    vessels (WTIV). With wind turbines getting bigger and moving away
    from the shorelines, many industry experts have warned of a
    potential vessel shortage because the existing fleet cannot meet
    all requirements. In its latest sector outlook published in
    December, IHS Markit’s Costs and Energy team estimated that at
    least 21 new WTIVs will be delivered between this year and 2025.But
    the fleet available to do the required work will only grow from 38
    units to 44 units in the same period, as some vessels are too small
    to handle forecast turbine hub heights and will be redeployed to
    other support sectors like geotechnical work. (IHS Markit Net-Zero
    Business Daily’s Max Lin)

    • The Global Wind Energy Council expects 235 GW of new offshore
      wind capacity will be added between 2021 and 2030. This will bring
      the total capacity to 270 GW before this decade ends.
    • According to the Brussels-based industry group’s forecast, new
      annual installations are to increase from 6.1 GW in 2020 to 23.1 GW
      in 2025 and, potentially, 40 GW in 2030.
    • To gain economies of scale and operational efficiency, wind
      project developers have been shifting to larger turbines in deeper
    • Consultancy Rystad Energy said the average offshore turbine
      size globally has risen to the current level of 6.5 MW from 3 MW in
      2010 (when China is excluded). Turbines larger than 8 MW are
      expected to account for 53% of total annual installations by 2030,
      compared with 3% in 2010-2021, according to Rystad.
    • In the Chinese market, where developers focused on
      shallow-water installations and faced less cost pressure earlier,
      most turbines are expected to measure between 6 MW and 8 MW this
    • Excluding China, Rystad expects global WTIV demand to reach 79
      vessels on an annual basis by 2030. Of them, 62 will need to be
      capable of installing turbines larger than 9 MW. This assessment
      does not consider non-operational days.
  3. U.S.-based multinational beverage maker The Coca-Cola Company
    aims to have at least 25% of all beverages sold globally in
    reusable packaging by 2030, the company said late last week. It
    aims to do this across all of its beverage brands sold in
    refillable or returnable glass or plastic bottles, or in refillable
    containers through traditional fountain or dispensers, the company
    said. (IHS Markit Chemical Market Advisory Service’s Chuan Ong)

    • The Coca-Cola Company said that accelerating reusable packaging
      use supports its goals of making 100% of primary consumer packaging
      recyclable by 2025, using 50% recycled material in its packaging by
      2030, and 1:1 collection and recycling of bottles or cans for every
      one sold by 2030.
    • Using reusable packaging promotes a circular economy, as
      refillable containers have high levels of collection and are
      low-carbon footprint beverage containers as container collection is
      built into the beverage delivery model, it explained.
    • Citing a third-party report, the company said that converting
      20% of global plastic packaging into reuse models is a $10 billion
      business opportunity that benefits customers and represents a
      crucial element in the quest to eliminate plastic waste and
    • It said refillable packaging already accounts for 25% or more
      of sales in more than 40 markets, 50% or more of sales in over 20
      markets, and 16% of its total global volume for 2020.
    • Use of refillables is growing in several markets, outperforming
      non-refillables in Germany and parts of Latin America, where
      reusable bottles represented 27% of transactions in 2020, said The
      Coca-Cola Company.
  4. Waymo has partnered with truck fleet operator CH Robinson to
    test automated trucks in Texas (United States). Under this
    partnership, Waymo Via, the company’s trucking and cargo
    transportation service, will conduct multiple pilot schemes by
    deploying its test fleet for CH Robinson’s customers in the
    Dallas-Houston transportation lane. The companies will collaborate
    to shape the future development and expansion of autonomous
    technology as a new mode of transport. Charlie Jatt, head of
    commercialization for trucking at Waymo Via, said, “We look forward
    to this collaboration with C.H. Robinson, both for their deep roots
    and experience in logistics and transportation, but also as a
    company that shares our vision of how technology and autonomous
    trucking can change our industry for the better. C.H. Robinson’s
    size, scale and platform gives us access to rich and unique
    transportation data along with customer relationships and pilot
    opportunities to help bring our Waymo Via solution to the market.”
    (IHS Markit Automotive Mobility’s Surabhi Rajpal)
  5. Jaguar Land Rover (JLR) has announced that it will work with
    Nvidia to develop its artificial intelligence (AI)-powered
    autonomous vehicle and connected services, with a nearly
    all-encompassing use of Nvidia hardware and software sets.
    According to a press statement, starting in 2025, all Jaguar and
    Land Rover vehicles will be built on the Nvidia Drive
    software-defined platform. JLR says that this will enable a “wide
    spectrum of active safety, automated driving and parking systems as
    well as driver assistance systems”, as well as AI inside the car.
    Interior elements will include driver monitoring and occupant
    monitoring and “advanced visualization of the vehicle’s
    environment”. Although software engineers from both companies will
    be involved, the full-stack solution is based on Nvidia Drive
    Hyperion with Drive Orin centralized AV computers; Drive AV and
    Drive IX software; safety, security, and networking systems; plus
    surround sensors. The company says that Drive Orin is the AI brain
    (a system-on-chip), and Drive Hyperion the central nervous system.
    JLR will use in-house-developed data center solutions with Nvidia
    DGX for training AI models and Drive Sim software built on Nvidia’s
    Omniverse. With these developments in its collaboration with
    Nvidia, JLR will join other automakers in the promise of routine
    over-the-air updates that transform a vehicle during its lifecycle.
    This is JLR’s next step towards the software-enabled and -defined
    car that many automakers are working towards, although JLR is
    focusing more on the partnership than developing as much as
    possible in-house, as some larger automakers are doing. JLR,
    however, is far from the only automaker working with Nvidia in one
    way or another. Volvo, Vinfast, Polestar, and others have announced
    work with Nvidia in the past year. (IHS Markit AutoIntelligence’s
  6. Shell BP SA Petroleum Refineries (Sapref), owner of the largest
    oil refinery in the South African economy, announced the indefinite
    suspension of its South African operations on 10 February. Sapref
    said rising input costs, such as for crude oil, labour, and
    electricity, combined with imminent changes in legislation, which
    will become binding in 2023, contributed to the decision. The
    state-owned Central Energy Fund, which manages the country’s energy
    assets, has shown an interest in buying the 180,000-barrels-per-day
    refinery, although the authorities have made no final investment
    decision. (IHS Markit Economists Thea
    Fourie and Langelihle

    • The South African downstream sector, although much more vibrant
      than elsewhere in sub-Saharan Africa, is facing a regulatory
      environment that is finally catching up with world standards. In
      recent years, investments were made by the South African refining
      industry to comply with CF1 regulations of 50 parts per million
      (ppm), which mandate motor fuels, gasoil, and gasoline (petrol)
      must not have a sulphur content of more than 50 ppm. This was
      followed by the updated Clean Fuel 2 (CF2) regulation, initially
      planned to come into effect in July 2017, which lowered the
      mandated maximum sulphur content in motor fuels, gasoil, and
      gasoline to 10 ppm. The CF2 regulation was gazetted in September
      2021, with a deadline for implementation of 1 September 2023.
    • The scale of new investment needed to upgrade the South African
      refineries to adhere to the CF2 legislation is massive, estimated
      at USD4 billion. Given the high complexity and high maintenance
      cost of the Sapref refinery, there is a likelihood of reassessment
      of the economic viability of the refinery under the new regulation.
      In such a case, a decision for its closure could be taken in the
      medium term if an interested buyer could not be found. One of South
      Africa’s other main refineries, the Enref refinery owned by Engen
      in Durban, has been shut down officially and has been converted
      into a fuel storage facility. Meanwhile, the future of another of
      the country’s main refineries, the Calref refinery owned by Astron
      in Cape Town, remains in the balance. The Calref refinery was shut
      down due to fire incidents in the second half of 2020.
    • The last lifeline of South Africa’s refining sector is the
      150,000-barrels-per-day coal-to-liquid (CTL) plant operated by
      Sasol, Natref. Sasol has reportedly reduced operating rates since
      2020, due to low demand. The CTL plant has recorded a strong
      operating rate of over 90% since 2018, with a slight decline to 85%
      in 2020. However, despite producing ultra-low-sulphur fuels, this
      plant reportedly would also need some investment to fully comply
      with the new regulation.
    • Considering the sector’s low margins and stressed finances, and
      the regulatory changes that mandate expensive upgrades, more
      refinery closures cannot be ruled out. In 2022, about 60% of South
      Africa’s oil demand is forecast to be supplied by imports, marking
      a substantial increase from around 25% in 2019, prior to the
      refinery closure.

Friday, February 18, 2022

  1. Cryptocurrency miners are poised to play an increasingly large
    role in addressing the vulnerabilities of the US power grid, even
    as scrutiny from lawmakers intensifies after miners decamped in
    droves to American shores following a Chinese government ban,
    raising electricity price and climate impact concerns. (IHS Markit
    Net-Zero Business Daily’s Keiron Greenhalgh)

    • Miners can currently provide speedy flexibility for grid
      operators, and at least one company recently stopped production
      during wintry blasts of weather to sell the power under its
      control. But the future offers even greater rewards for the
      backbone of President Joe Biden’s climate goals, analysts and
      executives say.
    • Cryptocurrency mining has possibilities as an additional
      revenue source for solar or wind developers, a storage asset, or
      even a strategy for regulated utilities to make money with, they
    • The dominant cryptocurrency is Bitcoin. Bitcoin mining’s total
      known power use globally was 3.338 GW at the end of December,
      according to data compiled by Coinshares Research, a Jersey,
      Channel Islands-headquartered digital investment house. The largest
      share of that mining power use was based in the US at 1.38 GW, or
      41.3%, while 787 MW or 23.6% was in Kazakhstan.
    • America’s share of Bitcoin mining increased from 4% in August
      2019 to 35% in July 2021, according to US Senator Elizabeth Warren,
      Democrat-Massachussets. The US’ share of mining soared after the
      Chinese ban came into effect in May 2021 and then was updated in
      September 2021, which the lawmaker said left 500,000 mining
      operations looking for new homes.
    • Computer servers known as “mining rigs” perform complex
      calculations to earn cryptocurrency blockchain such as Bitcoin.
      These servers require vast computational power and substantial
      amounts of electricity. As a result, miners typically seek out the
      cheapest power as a result. Where that is coal-fired generation,
      miners have attracted negative publicity against the backdrop of
      more ambitious US climate goals.
    • Warren and fellow lawmakers Sheldon Whitehouse, Jeff Merkley,
      Maggie Hassan, Ed Markey, Katie Porter, Rashida Tlaib, and Jared
      Huffman, sent letters 27 January to crypto mining companies seeking
      answers on their grid and climate impact. The six
      companies—Riot Blockchain, Marathon Digital Holdings,
      Stronghold Digital Mining, Bitdeer, Bitfury Group, and Bit
      Digital—were given until 10 February to respond.
    • “The extraordinarily high energy usage and carbon emissions
      associated with Bitcoin mining could undermine our hard work to
      tackle the climate crisis—not to mention the harmful impacts
      crypto mining has on local environments and electricity prices,”
      said Warren in a statement revealing her latest consumer protection
  2. Brazil’s Braskem and France’s Veolia will jointly invest in a
    renewable energy project in Alagoas to power its petrochemical
    production, Braskem said this week. The Brazilian petrochemical
    company signed a BRL 400 million ($77 million) investment agreement
    with French environmental services company Veolia to produce
    renewable energy using steam from eucalyptus biomass, Braskem said.
    (IHS Markit Chemical Market Advisory Service’s Chuan Ong)

    • The project will generate 900,000 mt/yr of steam for 20 years,
      which will mean emission reductions of approximately 150,000 mt/yr
      of CO2, said Braskem.
    • Braskem plans to site the plant in Marechal Deodoro
      municipality in Brazil’s state of Alagoas, and to begin operating
      in 2023.
    • The company expects the project advances two of its objectives:
      a 15% reduction in greenhouse gas emissions by 2030, and achieving
      carbon neutrality by 2050.
    • The eucalyptus biomass project is a new energy generation
      method for Braskem that is intended to sustainably fulfil steam
      demand for petrochemical plant operations, the company said.
    • “We will reduce the greenhouse gas emissions generated by our
      operations in Alagoas by one-third, based on our 2020 emissions,”
      said a Braskem executive.
    • Veolia will manage most of the project, including agricultural
      and forestry management involving over 5,500 hectares of eucalyptus
      groves. It will also handle the engineering concept of the project,
      construction of biomass processing and steam production plants,
      plus operation and maintenance of the entire facility for the
      20-year agreement period, said Braskem.
    • It will make internal investments to adapt its Marechal Deodoro
      complex to this new thermoelectric system.
  3. Green hydrogen producer Hy2Gen AD has secured €200 million
    ($227.3 million) from a variety of investors to construct
    facilities to deliver this clean fuel for use in a variety of
    aviation, maritime, ground transport, and industrial applications
    in Europe and North America. The Wiesbaden, Germany, company said
    it raised the private capital from a variety of investors,
    including Hy24, a green hydrogen investment platform launched in
    October with the sole purpose of raising €1.5 billion ($1.7
    billion) to accelerate large-scale clean hydrogen projects and
    infrastructure. (IHS Markit Net-Zero Business Daily’s Amena

    • “As early as 2021, we were looking for the best possible
      combination of financial and strategic investors to build e-fuel
      production facilities,” Hy2Gen CEO said in the 17 February
      announcement. “These have the potential to decarbonize entire
      industries and transport sectors. We are now very pleased that all
      parties have sealed the largest investment in this segment.”
    • With growing demand from regulators and investors to
      decarbonize transportation and manufacturing sectors, hydrogen,
      especially the “green” variety produced from renewable power
      sources, is increasingly being viewed as an alternative to
      carbon-intensive fossil fuels. In liquid form, hydrogen can be
      transported in existing pipelines or shipped in specially designed
      seaborne carriers, while in solid form it can be used in fuel cells
      for automobiles, and can be used to produce steel and cement, two
      traditionally carbon-intensive industrial processes.
    • The International Renewable Energy Agency in January said green
      hydrogen could be most economical in locations that have “the
      optimal combination of abundant renewable resources, space for
      solar or wind farms, and access to water, along with the capability
      to export to large demand centers.”
    • The Hy2Gen project is Hy24’s first investment foray. It is
      funding the Hy2Gen from its clean hydrogen infrastructure fund for
      which it has raised €1 billion ($1.13 billion) to date, Hy24 CEO
      Pierre-Etienne Franc said in a statement accompanying the 17
      February announcement. This investment will enable Hy24 to “step
      into its role as a catalyst for hydrogen-based projects at scale to
      foster the energy transition,” Franc added. Other investors in the
      Hy2Gen project include French investment firm Mirova, Canada-based
      pension fund Caisse de dépôt et placement du Québec (CDQP), and
      French engineering and construction firm Technip Energies.
  4. Volkswagen (VW) is in talks with Chinese tech giant Huawei
    about acquiring an autonomous vehicle unit, reports Reuters citing
    German business magazine Manager Magazin. The automaker is said to
    have been negotiating the deal for several months, according to
    Manager Magazin citing inside sources. The automaker declined to
    comment when approached by Reuters on the matter. VW Group CEO
    Herbert Diess said on 16 February that the company was pursuing
    more partnerships to increase its self-sufficiency in software.
    Diess also said he expects widespread adoption of vehicle
    automation technologies in cars within 25 years. VW has been
    expanding its software development unit since 2019, with the aim
    for all of the group’s new models to run on its own operating
    system from 2025 onwards. It is still too soon to tell if VW could
    reach a deal with Huawei on the development of automated
    technologies. A possible tie-up with the Chinese tech giant by
    either partnerships or acquisitions would strengthen VW’s capacity
    to introduce competitive smart electric vehicles (EVs) to its key
    markets, especially China. Huawei already introduced its smart
    cabin and automated driving systems to several new models on sale
    in China. The Arcfox Alpha-S, an electric sedan introduced by
    Arcfox, is equipped with Huawei’s automated operation systems,
    while the AITO M5, a new model introduced by Seres, also features
    Huawei’s smart cabin systems. (IHS Markit AutoIntelligence’s Abby
    Chun Tu)
  5. Stellantis is looking to close some of its non-production sites
    in France, reports Reuters. A company spokesperson told the new
    service that the company intends to reduce the number of sites in
    the Paris (France) region that focus on administration and research
    from five to three as staff shift to working from home. It said
    that the move would also reduce costs. The representative the sites
    most likely to close were those at Satory and Trappes. Separately,
    the Italian government has indicated that it will provide support
    for battery facility investment planned by Stellantis in the
    country. Minister of Economic Development Giancarlo Giorgetti was
    quoted as telling Il Sole 24 Ore in an interview, “We are convinced
    that Stellantis should continue to be engaged in Italy and the
    gigafactory in Termoli which [the Italian government] will support
    with EUR369 million of public money demonstrates this.” The senior
    politician also told the newspaper that a package of measures to
    support the purchase of low emission vehicles and the conversion of
    facilities to battery electric vehicles (BEVs) worth around EUR1
    billion per year for at least three years could be approved by the
    government on Friday (18 February). (IHS Markit AutoIntelligence’s
    Ian Fletcher)
  6. The Monetary Policy Committee of the Central Bank of the
    Republic of Turkey (Türkiye Cumhuriyet Merkez Bankası: TCMB) held
    its main policy rate, the one-week repo rate, unchanged at 14.0% at
    its regularly scheduled, monthly policy-setting meeting on 17
    February. This was the second month in a row that the rate was held
    steady after the bank reduced the rate by 500 basis points between
    September and December 2021. (IHS Markit Economist Andrew

    • In its press release alongside the meeting, the TCMB states
      that current inflation is “driven by pricing formations that are
      not supported by economic fundamentals”. Included in these
      pressures are global energy prices, food and commodity prices,
      ongoing supply constraints, and demand developments.
    • The bank claims to be confident that a disinflation process
      will begin soon given actions taken by the TCMB and the government
      and due to shifting base effects. For those reasons, the bank
      declined to raise the policy rate even though the annual inflation
      rate soared to 48.7% in January.
    • In recent weeks, President Recep Tayyip Erdoǧan has pushed
      through a couple of administrative changes to try to limit
      inflationary pressures. On 16 February, he announced that the
      government would adjust electricity tariff levels, benefiting 4
      million households. Additionally, his energy secretary announced
      the next day a 25% reduction in electricity prices for small
      tradespeople. These moves partially reverse the sharp increase in
      energy prices that began immediately after the beginning of the
      year. Those price adjustments have triggered a wave of
    • Additionally, the government had previously announced the
      reduction of sales taxes on many foods from 8% to 1% in the hope of
      combatting inflationary pressures.

Posted 21 February 2022 by Chris Fenske, Head of Fixed Income Research, Americas

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