March 21 update

Asian stocks rose on Thursday morning, with Japan’s Nikkei index reaching a new high. They followed the lead of American indices, which also reached fresh highs after the Federal Reserve left its benchmark interest rate unchanged at a range of 5.25% to 5.5%. Jerome Powell, the Fed’s chairman, said he was pleased with progress in bringing inflation down but did not indicate when interest-rate cuts might begin. (Most investors reckon June.) America’s central bankers still expect to lower rates three times this year.

The Swiss National Bank cut its main interest rate by a quarter of a percentage point to 1.50%, sending the franc to an eight-month low against the euro. The SNB is the first major central bank to cut rates after an extended period of monetary tightening. The decision follows a period of low inflation in Switzerland, where price rises have remained within the SNB’s target range of 0-2% for the last nine months.

A suicide bombing killed at least three people in Afghanistan, according to Taliban authorities, though independent media reported that the number of dead is over 20. The attack targeted a bank in Kandahar, the Taliban’s main seat of power. Afghanistan has been beset by suicide bombings in recent years, mostly perpetrated by ISKP, an affiliate of Islamic State.

Turkey’s central bank hiked its main interest rate by 5 percentage points, to 50%, in an effort to steady the lira. Price rises in Turkey exceeded expectations in January and February, with an unexpected increase in consumer prices putting inflation on a path to exceed 70%. The bank’s decision surprised economists, who widely predicted that the bank would hold rates.

Russian forces launched ballistic and cruise missiles at Kyiv, injuring at least 13 people. The attack, the biggest on the capital in weeks, damaged apartment buildings and industrial facilities, as well as a kindergarten. At least two people were hospitalised. Ukrainian officials said all 31 Russian missiles had been shot down, with their debris causing the damage.

Two people close to María Corina Machado, Venezuela’s leading opposition figure, were arrested for alleged involvement in an anti-government conspiracy. Arrest warrants for seven more of Ms Machado’s staffers were also announced. Last year Ms Machado won her party’s presidential primary in a landslide. That spooked Nicolás Maduro, Venezuela’s autocratic president. She was swiftly barred from holding public office for 15 years.

Neuralink, Elon Musk’s startup, live-streamed a quadriplegic man using the company’s brain implant to play chess on a computer. The 29-year-old man, who was paralysed below the shoulder after a diving accident, was also able to play “Civilization VI”, a video game, for eight hours using only his thoughts. Neuralink is one of several companies making progress on brain-computer interfaces.

Figure of the day: $236bn, the amount that Argentina owed to foreign creditors when President Javier Milei took office in December. Read the full story.

In the run-up to America’s presidential election, we’ve launched The US in brief—a daily update to help you keep on top of the political stories that matter. Sign up here to receive it as a newsletter, each weekday, in your inbox.

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photo: dave simonds

The EU’s fragmented foreign policy

On Thursday the leaders of the EU’s 27 countries will attend the first of four summits to be held in the next 100 days. The confab will focus on defence and foreign policy, and especially on the conflicts in Ukraine and Gaza.

Politicians will discuss how Europe can spend more—and better—on defence to deter Russia. They will debate about (but probably reach no firm agreement on) how to use windfall profits on frozen Russian assets. More contentious still will be discussion of the recent suggestion by Emmanuel Macron, France’s president, that some countries may send troops to Ukraine. That would cross a red line for many, including the EU’s largest member, Germany.

On the situation in Gaza the rifts within the EU are wider yet. The discussion between backers of Israel and governments more sympathetic to the Palestinian cause will be heated.

photo: epa

Nike races to stay ahead

Nike, the world’s largest maker of sportswear, announces its quarterly results on Thursday, covering the three months ending in February 2024. In the last fiscal year, which ended in May 2023, Nike’s annual sales were up by a tenth. But the company expects only a 1% growth in sales this year. The slowdown is partly caused by softening consumer demand, especially in China and Europe. Nike is also losing ground to upstart footwear brands like Hoka and On Running.

To “reignite” its growth, the company announced in February that it would cut more than 1,500 jobs, or 2% of its workforce. This was part of a plan to trim costs by $2bn over the next three years. The company is also investing in smaller, techier stores designed to showcase its products and encourage people to shop online. By 2025 Nike aims to sell 60% of its wares directly to consumers, either online or through its own stores, cutting out traditional retailers. The brand is also expecting a boost from the 2024 Summer Olympics in Paris, where it will be the official sponsor of the American gymnastics team.

photo: alamy

What’s the right rate for Britain?

The Bank of England’s monetary policy committee kept interest rates flat at 5.25% after meeting on Thursday, as widely expected. But the shifting composition of the vote suggests that the committee is moving gradually towards rate cuts. In January, two members called for further rate increases. This time, none did. One member, Swati Dhingra, voted for a cut at both meetings. Earlier the same day, the Swiss National Bank became the first major central bank to cut interest rates this cycle with a surprise 0.25% cut.

Britain’s economy looks feeble. The country entered a technical recession in the second half of 2023, though the economy expanded a bit in February. The annual inflation rate continued to fall from 4% in January to 3.4% in February. Further declines towards the Bank's 2% target are widely expected. But chatter is emerging about a pre-election fiscal event in the summer or in early autumn. That may nudge the Bank to be cautious: tax giveaways could risk reigniting inflation.

photo: reddit, inc. © 2024

Reddit’s buzzy IPO

On Thursday shares in Reddit will begin trading on the New York Stock Exchange. The social-media platform is seeking a valuation of around $6.4bn. The listing is reportedly four to five times oversubscribed. But some are sceptical that the stock will be a hit.

Founded in 2005, Reddit is a forum-based website where members talk on “subreddits” about shared interests, ranging from do-it-yourself plumbing to cat photos. The site claims to have 267m average weekly active users. Even so, its annual revenues of $800m, almost all from advertising, are lower than those of rivals such as X (formerly Twitter). It recorded a loss of $91m in 2023.

It has other worries, too. America’s Federal Trade Commission is probing the company’s licensing of user data to firms that are developing artificial-intelligence models. (Reddit says it has done nothing wrong.) Even if investors do not flock to Reddit’s stock, they may still cheer its listing as a sign that America’s IPO market is slowly coming back to life.

photo: getty images

Has the UN’s climate treaty failed?

Thursday marks 30 years since the United Nations Framework Convention on Climate Change first came into force. The treaty committed signatories to stabilising greenhouse-gas concentrations in order to “prevent dangerous anthropogenic interference with the climate system”. But despite being ratified by 197 countries and the EU, pessimists would say the convention has failed to achieve its aim.

Since 1994, the amount of carbon in the atmosphere has risen from around 360 parts per million to around 425. By the end of the century average global temperatures are expected to be roughly 2.7°C higher than those before the industrial revolution, well above the generally accepted upper limit of 2°C.

Optimists, however, might point out that things once looked much worse: when the UNFCCC was forged, business-as-usual projections showed temperatures rising by 3.5°C or more. The shift is due, in large part, to international climate commitments, including the Paris agreement in 2015, hammered out under the UNFCCC.