WORLDWIDE: HEADLINES 

Rising Energy Prices Push Almost Half German Companies To Cut New Investments – Survey 

Around 40% of German companies are already feeling the impact of rising energy prices and almost half want to reduce investments due to rising energy costs, a survey showed on Monday. 

Gas and electricity bills for German householders entering into new contracts hit a record high last month and soaring natural gas and oil prices following Russia’s invasion of Ukraine helped push Germany’s annual inflation to a 40-year high in March. 

Around 46% of companies said they want to reduce investments due to rising energy prices and a quarter of German companies expect to see a burden from price shock in the second half of the year, a survey by the Ifo Institute published by Augsburger Allgemeine newspaper showed. 

The survey, which questioned 1,100 companies, most of them family businesses, showed that every tenth firm was considering giving up energy-intensive businesses entirely, while 14% were mulling job cuts due to rising energy costs. 

Full coverage: REUTERS  

Britain’s Morrisons Picks Out Over 500 Products For Price Cuts

Against a backdrop of soaring inflation in Britain’s food retail sector, supermarket group Morrisons said on Monday it was reducing prices on over 500 products. 

Britain’s fourth largest grocer after Tesco (TSCO.L), Sainsbury’s (SBRY.L) and Asda said the lower prices cover 6% of its total volume sales. 

Morrisons, owned since October by U.S. private equity firm Clayton, Dubilier & Rice, has been the worst performer of Britain’s so-called “big four” grocers in recent months, according to industry data. 

It said the price cuts were in essential items such as eggs, baked beans, rice, coffee, cereals, chicken, sausages and nappies. It said the average saving was 13%. 

The group has also introduced new “multi save” promotions, such as two boxes of cereal for 1.80 pounds ($2.30) and a “Compare & Save” campaign to help shoppers identify savings that can be made by swapping branded items for Morrisons’ own brand products. 

Surging prices are causing the biggest squeeze on UK household incomes since at least the 1950s. 

Full coverage: REUTERS 

WORLDWIDE: FINANCE/BUSINESS 

Stocks Slide, Dollar Climbs As Rate Hike Concern In Focus 

Asian stocks fell the most in two weeks on Monday as concern about rapid U.S. rate rises and slowing growth rattled investors, while the euro found support after Emmanuel Macron won a second term as French president. 

MSCI’s broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) slid 1.6% to a six-week low, and a nudge from authorities extended steep losses for the Chinese yuan. 

Japan’s Nikkei (.N225) fell 1.9%. Hong Kong’s Hang Seng (.HSI) fell 3%. S&P 500 futures dropped 0.8% while FTSE futures and European futures were off by more than 1%. Oil fell 2.7%. 

The euro was broadly steady at $1.0802, compared with broad dollar gains elsewhere, and it touched an almost two-month high against a struggling sterling . 

Macron comfortably saw off a far-right challenge, reassuring markets about France’s commitment to an integrated Europe, even if his economic platform now depends on parliamentary elections in June. 

“The absence of a change of course will reassure not only the other European Union countries but also the NATO,” said Vincent Mortier, chief investment officer of Amundi, Europe’s largest fund manager. 

The news was small relief, though, for broader worry about a global backdrop of high inflation and likely rate rises that have been pounding bond markets for months – exacerbated by war in Ukraine and disruption from coronavirus-related lockdowns in China. 

U.S. shares had tumbled at the end of last week after Federal Reserve Chairman Jerome Powell said a 50-basis-point rate hike was on the table at May’s meeting and St. Louis Fed President James Bullard floated the idea of 75 bp hikes. 

“Concerns around rates and recession are now the biggest risks for investors” with a particular focus on demand, said Candace Browning, head of global research at Bank of America. 

“Spiking food and gasoline prices plus the end of key stimulus programs has investors concerned about the low-income consumer’s ability to spend.” 

The Treasury market steadied, keeping the benchmark 10-year yield at 2.8581% and the two-year yield off last week’s highs at 2.6399%. 

Harsh restrictions in China have also begun to spread to Beijing, where more than a dozen buildings have been locked down, as concern grows about the economic damage of the shutdown of Shanghai. 

Full coverage: REUTERS 

Euro Inches Up After Macron’s Victory, Gains Against Bruised Sterling 

The euro gained a fraction in early trade on Monday following French President Emmanuel Macron’s comfortable Sunday defeat of far-right rival Marine Le Pen, the outcome largely expected by markets and political analysts. 

The euro opened higher at $1.0840, was last trading at $1.0807, up 0.12% from Friday’s close, but couldn’t break far from a two-year low hit last week. 

The currency rose 0.14% against sterling to 84.22 pence, hitting a three-week peak in early trade. 

With 97% of votes counted, Macron was on course for a solid 57.4% of the vote, interior ministry figures showed. In his victory speech he acknowledged that many people had only voted for him only to keep Le Pen out, and he promised to address the sense of many French that their living standards were slipping. 

“Macron’s clear victory is likely to reassure the markets that the European dynamic will continue. In the short term, the main logical beneficiary of this election could be the euro, which was still flirting last Friday with two-year lows against the dollar,” said Frederic Leroux, a member of the investment team at Carmignac. 

“The negative aspect for the markets of this rather comfortable election could however come from a quick decision in favour of a Russian oil embargo, which would exacerbate inflationary pressures and economic slowdown in Europe.” 

The euro, along with most of its major peers, has been bruised by an upward march by the dollar that is boosted by rising U.S. Treasury yields. Markets are repositioning themselves for an aggressive programme of rate hikes from the U.S. Federal Reserve. 

Full coverage: REUTERS 

Oil Prices Extend Losses As Shanghai Lockdowns Hit Demand Outlook 

Oil prices extended losses on Monday amid persistent worries that prolonged COVID-19 lockdowns in Shanghai and potential U.S. rate hikes would dent global economic growth and fuel demand. 

Brent crude futures slid $1.90, or 1.8%, to $104.75 a barrel at 0015 GMT, while U.S. West Texas Intermediate (WTI) crude futures fell $1.89, or 1.9%, to $100.18 a barrel. 

The benchmarks lost nearly 5% last week on demand concerns. 

“Bearish sentiment outweighed concerns over tight global supply as China continued lockdowns in Shanghai and investors prepared for a series of U.S. rate hikes,” said Hiroyuki Kikukawa, general manager of research at Nissan Securities. 

Investors are trying to adjust their positions before the U.S. summer driving season kicks off later in May, he said. 

“But oil prices are not expected to fall below $90 a barrel due to the prospect of a potential ban by European Union on Russian oil amid a deepening Ukraine crisis,” he said. 

Full coverage: REUTERS