International News 07/02
Oil prices remain stable as Blinken visits Middle East.
Oil prices remained stable as market participants evaluated US Secretary of State Antony Blinken's visit to the Middle East to discuss a ceasefire. Brent oil futures for April 2024 delivery fell 2 cents to $77.97 per barrel, while West Texas Intermediate (WTI) crude oil futures for March 2024 delivery dropped 3 cents to $72.75. These contracts had gained nearly 1% the previous day. Blinken's meeting with Saudi Arabia's de-facto ruler raised hopes for a ceasefire in Gaza. The militant group Hamas is yet to respond to the ceasefire offer presented by Qatar and Egypt. Meanwhile, the US is continuing its operations against the Iran-backed Houthis in Yemen, who have been disrupting global oil trade routes by attacking shipping vessels. There have also been reports of Ukrainian drones attacking targets in Russia.
Approximately 528 employees at Snap will be laid off.
Snap, the parent company of Snapchat, has announced plans to cut around 10% of its global workforce, which amounts to approximately 528 employees. This move suggests that the trend of layoffs seen in 2023 may continue as the company navigates economic uncertainty. Snap stated that this decision was made to restructure its team to better focus on priorities and ensure the ability to invest for future growth. The company anticipates pre-tax charges of $55 million to $75 million, mainly for severance and related costs. The majority of expenses are expected to be incurred in the first quarter of 2024. This action is in line with other tech and media companies, such as Amazon and Alphabet. In 2024, 122 tech companies have laid off almost 32,000 employees.
UBS predicts that the Federal Reserve will cut interest rates in May.
UBS predicts that the Federal Reserve (Fed) will begin reducing interest rates in May, instead of March as previously anticipated. The Fed recently decided to maintain interest rates at their current level and stated that a rate cut would only be implemented once conditions became safer and inflation continued to decline from elevated levels. The uncertainty surrounding an early rate cut was compounded by a strong labour market report. UBS economists believe that the Fed is in transition and may not be comfortable with the idea of a rate cut in March. Goldman Sachs and Bofa Global Research have also revised their rate cut expectations to May and June, respectively.