August has been something of damp squib in terms of equity market performance, with the spring and early summer rally fizzling out last month.
Central bank rhetoric has remained hawkish in recent weeks even as inflation appears to have peaked in developed markets, with policymakers pushing back against market expectations for rate cuts sooner rather than later, and this has probably weighed on sentiment towards risk assets.
In his speech at the annual gathering of central bankers at Jackson Hole in late August, Federal Reserve chairman Jerome Powell stressed that the Fed remains committed to its 2 per cent inflation target, and that inflation “remains too high”, even though recent data has been encouraging.
Economic data for the US remains robust, particularly against the backdrop of the sharp rise in interest rates since March 2022, with Mr Powell noting in his comments that the “economy may not be cooling as expected”.
While we continue to see weakness in the manufacturing sector, and investment has cooled, economic growth has remained above 2 per cent this year, supported by strong consumer spending that in turn has been underpinned by low unemployment and rising wages.
However, there is now more evidence that the US labour market is finally cooling: the number of job openings in July fell to levels not seen since early 2021, and the unemployment rate jumped to 3.8 per cent in August, although that was largely due to a rise in the number of people looking for work.
Job growth has averaged just 150,000 per month in the three months to August, the lowest average growth in jobs since 2019 (excluding the depth of the pandemic in the second quarter of 2020, when it was negative).
Perhaps most encouragingly for the Fed, average hourly earnings grew at the slowest pace in August since February 2022. Although the Fed is likely to keep talking tough, possibly keeping another 25 basis point hike in its updated interest rate projections this month, we think the benchmark Fed Funds rate is at its peak.
While upside risks to inflation remain – food prices globally have started to rise, as have energy prices – growth outside the US is lacklustre.
Recent survey data for the eurozone points to a contraction on the back of a weak manufacturing sector, and preliminary PMI data for the UK in August was also much weaker than expected.
While inflation in both the eurozone and the UK remains higher than in the US, central banks may be more reticent to raise rates much further given their much weaker economies.
There has also in recent weeks been no shortage of reports pointing to disappointing economic data from China. Expectations had been high for a material surge in growth as China abandoned its remaining zero-Covid policies at the beginning of 2023, but it now seems probable that Chinese growth will only just match the (relatively low by historical standards) 5 per cent growth target announced at the beginning of the year.
Slower growth in China ultimately means lower global growth. This would usually be met with easier monetary policy (ie rate cuts), but we think the probability of that happening this time is much lower, primarily because inflation is still far too high in too many countries.
While we believe developed market central banks are probably at or near their terminal rates, they will probably need to remain there well into 2024.
Emerging market central banks have already started to lower policy rates, as they were the first to tighten coming out of the pandemic and seemingly have inflation tamed. Latin America’s central banks have led the way, with Chile, Brazil, Uruguay and Costa Rica cutting rates in recent months. The People’s Bank of China has also reduced rates and extended other measures to support the economy.
However, there is reason for caution as rising food and energy prices may slow disinflation in emerging markets in the coming months. Higher-for-longer US rates are also likely to be a limiting factor on emerging market central banks as they seek to ease monetary policy and support growth in their economies.
Khatija Haque is chief economist and head of research at Emirates NBD
Cry Macho
Director: Clint Eastwood
Stars: Clint Eastwood, Dwight Yoakam
Rating:**
Silent Hill f
Publisher: Konami
Platforms: PlayStation 5, Xbox Series X/S, PC
Rating: 4.5/5
Real estate tokenisation project
Dubai launched the pilot phase of its real estate tokenisation project last month.
The initiative focuses on converting real estate assets into digital tokens recorded on blockchain technology and helps in streamlining the process of buying, selling and investing, the Dubai Land Department said.
Dubai’s real estate tokenisation market is projected to reach Dh60 billion ($16.33 billion) by 2033, representing 7 per cent of the emirate’s total property transactions, according to the DLD.
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match details
Wales v Hungary
Cardiff City Stadium, kick-off 11.45pm
UAE currency: the story behind the money in your pockets
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Labour dispute
The insured employee may still file an ILOE claim even if a labour dispute is ongoing post termination, but the insurer may suspend or reject payment, until the courts resolve the dispute, especially if the reason for termination is contested. The outcome of the labour court proceedings can directly affect eligibility.
- Abdullah Ishnaneh, Partner, BSA Law
More from Neighbourhood Watch:
Results
5pm: Reem Island – Conditions (PA) Dh80,000 (Turf) 1,600m; Winner: Farasah, Antonio Fresu (jockey), Musabah Al Muhairi
5.30pm: Sir Baniyas Island – Maiden (PA) Dh80,000 (T) 1,400m; Winner: SSR Ghazwan, Antonio Fresu, Ibrahim Al Hadhrami
6pm: Wathba Stallions Cup – Handicap (PA) Dh70,000 (T) 1,400m; Winner: Astral Del Sol, Sean Kirrane, Ibrahim Al Hadhrami
6.30pm: Al Maryah Island – Maiden (PA) Dh80,000 (T) 2,200m; Winner: Toumadher, Dane O’Neill, Jaber Bittar
7pm: Yas Island – Handicap (PA) Dh80,000 (T) 2,200m; Winner: AF Mukhrej, Tadhg O’Shea, Ernst Oertel
7.30pm: Saadiyat Island – Handicap (TB) Dh80,000 (T) 2,400m; Winner: Celestial Spheres, Gary Sanchez, Ismail Mohammed
The biog
Name: Capt Shadia Khasif
Position: Head of the Criminal Registration Department at Hatta police
Family: Five sons and three daughters
The first female investigator in Hatta.
Role Model: Father
She believes that there is a solution to every problem
Indika
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GOLF’S RAHMBO
- 5 wins in 22 months as pro
- Three wins in past 10 starts
- 45 pro starts worldwide: 5 wins, 17 top 5s
- Ranked 551th in world on debut, now No 4 (was No 2 earlier this year)
- 5th player in last 30 years to win 3 European Tour and 2 PGA Tour titles before age 24 (Woods, Garcia, McIlroy, Spieth)
Overall head-to-head
Federer 6-1 Cilic
Head-to-head at Wimbledon
Federer 1-0 Cilic
Grand Slams titles
Federer 18-1 Cilic
Best Wimbledon performance
Federer: Winner (2003, 2004, 2005, 2006, 2007, 2009, 2012)
Cilic: Final (2017*)
Sri Lanka v England
First Test, at Galle
England won by 211
Second Test, at Kandy
England won by 57 runs
Third Test, at Colombo
From Nov 23-27
COMPANY PROFILE
Founders: Alhaan Ahmed, Alyina Ahmed and Maximo Tettamanzi
Total funding: Self funded
Our legal consultant
Name: Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
What is Reform?
Reform is a right-wing, populist party led by Nigel Farage, a former MEP who won a seat in the House of Commons last year at his eighth attempt and a prominent figure in the campaign for the UK to leave the European Union.
It was founded in 2018 and originally called the Brexit Party.
Many of its members previously belonged to UKIP or the mainstream Conservatives.
After Brexit took place, the party focused on the reformation of British democracy.
Former Tory deputy chairman Lee Anderson became its first MP after defecting in March 2024.
The party gained support from Elon Musk, and had hoped the tech billionaire would make a £100m donation. However, Mr Musk changed his mind and called for Mr Farage to step down as leader in a row involving the US tycoon's support for far-right figurehead Tommy Robinson who is in prison for contempt of court.
Dust and sand storms compared
Sand storm
- Particle size: Larger, heavier sand grains
- Visibility: Often dramatic with thick "walls" of sand
- Duration: Short-lived, typically localised
- Travel distance: Limited
- Source: Open desert areas with strong winds
Dust storm
- Particle size: Much finer, lightweight particles
- Visibility: Hazy skies but less intense
- Duration: Can linger for days
- Travel distance: Long-range, up to thousands of kilometres
- Source: Can be carried from distant regions
Gifts exchanged
- King Charles - replica of President Eisenhower Sword
- Queen Camilla - Tiffany & Co vintage 18-carat gold, diamond and ruby flower brooch
- Donald Trump - hand-bound leather book with Declaration of Independence
- Melania Trump - personalised Anya Hindmarch handbag
The specs
Engine: 4.0-litre V8 twin-turbocharged and three electric motors
Power: Combined output 920hp
Torque: 730Nm at 4,000-7,000rpm
Transmission: 8-speed dual-clutch automatic
Fuel consumption: 11.2L/100km
On sale: Now, deliveries expected later in 2025
Price: expected to start at Dh1,432,000
THE BIO: Martin Van Almsick
Hometown: Cologne, Germany
Family: Wife Hanan Ahmed and their three children, Marrah (23), Tibijan (19), Amon (13)
Favourite dessert: Umm Ali with dark camel milk chocolate flakes
Favourite hobby: Football
Breakfast routine: a tall glass of camel milk
Specs
Engine: Duel electric motors
Power: 659hp
Torque: 1075Nm
On sale: Available for pre-order now
Price: On request
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Tamkeen's offering
- Option 1: 70% in year 1, 50% in year 2, 30% in year 3
- Option 2: 50% across three years
- Option 3: 30% across five years
Zayed%20Centre%20for%20Research
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