US inflation ticks back up to 3.4%

The US Consumer Price Index for All Urban Consumers (CPI-U) increased 0.3% in December on a seasonally adjusted basis, after rising 0.1% in November, the US Bureau of Labor Statistics has reported. 

Over the past 12 months, the all items index increased 3.4% before seasonal adjustment. This represents a more significant increase than the 3.1% reported for the 12 months ending November. The all items less food and energy index, the gauge for core inflation, rose 3.9% over the last 12 months after increasing 4.0% the previous month. The energy index decreased 2.0% for the 12 months ending December, while the food index increased 2.7% over the last year. 

Looking at the monthly statistics, the index for shelter continued to rise in December, contributing over half of the monthly all items increase. The energy index rose 0.4% over the month as increases in the electricity and gasoline indexes more than offset a decrease in the natural gas index. The food index increased 0.2% in December, as in November. The index for food at home increased 0.1% over the month, and the index for food away from home rose 0.3%. 

The index for all items less food and energy rose 0.3% in December, the same monthly increase as in November. Indexes which increased in December include shelter, motor vehicle insurance, and medical care. The index for household furnishings and operations and the index for personal care were among those that decreased over the month.

Commenting on US CPI and Initial Jobless Claims, Ryan Brandham, Head of Global Capital Markets, North America, at Validus Risk Management said: “US CPI came in higher than expected on both a headline and core basis. These latest figures could give fuel to the hawks and reinforce both the USD strength and rise in US yields we’ve seen so far in 2024… The final stretch of the path back to the 2% inflation target could be harder than the market is anticipating.”

Nathaniel Casey, Investment Strategist at Evelyn Partners, said: “Despite today’s report suggesting a setback in disinflationary progress, over recent months there have been three key macro trends that, in our view, have reduced the likelihood of a US economic hard landing. First, the labour market has started to soften without a notable step up in the unemployment rate. Second, wage growth is starting to moderate towards levels that would be consistent with the Fed’s 2% inflation target. Third, inflation has been decelerating faster than many forecasters had expected.”

Dan Boardman-Weston, Chief Executive at BRI Wealth Management, added: “Markets had all but declared the battle with inflation over in the final few months of 2023, but these readings add weight to the argument that the final efforts to get inflation down to target may be trickier than expected. The inflation figures are compounded by stronger than expected initial jobless claim figures, coming in at 202k for December, compared to expectations of 210k.”

 

E.ON issues €1.5bn of green bonds

Energy firm E.ON has successfully issued two bond tranches with a combined volume of €1.5bn. These are a €750m million green bond maturing in January 2031 with a coupon of 3.375% and a €750m green bond maturing in January 2036 with a coupon of 3.750%.

The transaction attracted high investor demand with a combined order book of over €4.6bn. Together with the €1.5bn pre-funding executed in August 2023, E.ON has already secured significant parts of its 2024 funding needs early in the year. The proceeds of the green bonds will finance and/or refinance Eligible Green Projects as defined in E.ON’s Green Bond Framework. Barclays, ING, SMBC and Société Générale acted as active bookrunners in the transaction.

“With today’s bond issuance we have set another cornerstone to cover our funding needs for 2024,” commented Marc Spieker, CFO at E.ON. “The investor demand reflects the continued confidence in E.ON as a stable, investment-driven growth company. The green bonds enable us to fund sustainable projects driving the further decarbonisation of energy systems. This underlines our position as the playmaker of the energy transition in Europe.” 

 

Digital Business Networks Alliance to operate US e-invoicing exchange network

The participants from the Business Payments Coalition's E-Invoice Exchange Market Pilot have announced the establishment of the Digital Business Networks Alliance (DBNAlliance). This nonprofit organisation serves as the legal entity overseeing the Exchange Framework. The DBNAlliance will be responsible for operating the electronic delivery exchange network in the United States. DBNAlliance's mission is to make the exchange of business-to-business documents smooth and frictionless, eliminating all the obstacles and inefficiencies that businesses are experiencing with traditional invoicing methods.  

The Digital Business Networks Alliance electronic network employs a four-corner model, where e-documents are sent and received through an access point or service provider that connects companies to the network. DBNAlliance will assist access points in connecting to the exchange framework and is responsible for defining electronic delivery standards, policies, rules, and guidelines. The exchange framework contains four types of participants as part of the four-corner network – the supplier, two access points otherwise known as service providers, and the buyer.

Following the initial launch of the exchange framework, DBNAlliance will bring to market the electronic exchange of business-to-business documents designed to improve the efficiency of B2B payments and supply chain management.

The board of directors for the DBNAlliance consists of e-invoice service providers, corporate executives, and electronic document exchange experts who have extensive experience and knowledge of the exchange framework. 

“The US e-invoicing exchange framework will enable businesses to reduce costs, drive efficiency, increase accuracy, and improve security around their invoicing processes,” said Jim Taylor, CEO, MarineNet and Interim President of the Digital Business Networks Alliance. “The DBNAlliance is committed to making it as easy as possible for businesses to connect with the exchange framework so that they can realise the benefits of e-invoicing.”

 

Credit risk index for Hong Kong exporters launched

Dun & Bradstreet (D&B), a global provider of business decisioning data and analytics, has announced the launch of "HKECIC - D&B Export Credit Risk Index", alongside the Hong Kong Export Credit Insurance Corporation (HKECIC) to support Hong Kong exporters to understand better industry sentiments, insights and assist more prudent and timely business decisions. This is designed to enable local exporters to leverage reliable and comprehensive macro and micro data sources and cross-analysis provided by the two organisations.

The HKECIC-D&B Export Credit Risk Index leverages data and insights from HKECIC and D&B. It employs weighted moving average analysis and evaluates aggregate insurance business data from HKECIC, focusing on two export credit risk indicators – claim data and payment difficulty data. Additionally, this index represents a macroeconomic overview curated by a team of D&B country and region intelligence experts, economists and data specialists. Their insights span nine distinct perspectives: short- and long-term economic outlooks, market potential, business regulatory environments, political insecurity, expropriation, foreign exchange, transfer, and business continuity.

The index covers five key markets: Canada, Mainland China, Germany, the UK, and the US. Within each market index, it is further delineated across three specific industries, namely Electrical Appliances, Electronics, Textiles & Clothing.  This approach ensures a nuanced and detailed assessment of export credit risks across diverse markets and industries.

“Hong Kong exporters had been facing hard times in recent years,” noted Terence Chiu, Commissioner, HKECIC. “In view of the geopolitical complexity and a more volatile global trade environment, we are glad to have Dun & Bradstreet as a partner in leveraging our data sources, including claim and payment difficulty data for cross analysis. The Index can provide insights and support Hong Kong exporters in strengthening their risk management.”

 

Deutsche Bank and ITFA release digital trade finance guide

Deutsche Bank, in association with the International Trade & Forfaiting Association (ITFA), has released a Guide to Digital Trade Finance. The guide provides an overview of the emerging technologies, legal frameworks, practices, rules, and standards driving digitalisation within trade finance.

The publication comes at a critical point in trade finance’s digitalisation journey, with the adoption of the Electronic Trade Documents Act (ETDA) in the UK acting as a catalyst for renewed action. As momentum builds to take trade finance to the next level – such that trade finance participants can enjoy the operational efficiency benefits seen in the payments landscape – the guide calls for the industry to foster and sustain collaboration.

The guide provides a deep dive into the latest trends affecting the digital trade finance space, including breakdowns of:

• How legal reforms are enabling the legal use of electronic transferable records both domestically and across borders.
• How trade finance actors can navigate the range of digital initiatives being worked on by industry bodies and utilities.
• The role of emerging technologies, from blockchain and AI to OCR and digital signatures, in digitalising trade finance.
• Why banks need to play a larger role in digitalisation initiatives, focusing on ensuring interoperability across the trade ecosystem.

Alongside contributions from Deutsche Bank and ITFA experts, the Guide features insights from Santander Corporate and Investment Banking, Lloyds Banking Group, the International Chamber of Commerce (ICC), Swift, Digital Container Shipping Association (DCSA), Sullivan & Worcester, T3i Partner Network, the Trade Advisory Network and Arqit.

 

Currencycloud and Multifi aim to fuel UK SMBs’ global growth

Currencycloud has partnered with Multifi, a UK-based cash flow management platform, to provide UK-based small and medium-sized businesses (SMBs) with an international payment solution, allowing them to convert and send funds to their global suppliers worldwide in over 35 currencies.

The partnership with Currencycloud is designed to enable Multifi to enhance its service by providing its SMB clients with an efficient international foreign exchange payment solution where they can payout locally to more than 180 countries. The service should provide customers with more opportunities and flexibility when moving money worldwide. In addition to a suite of local payment rails and competitive FX, customers can access credit from Multifi.

“We are committed to fuelling the growth of our SMB customers by simplifying access to business finance and helping them manage their cash flow,” said Rob Keown-Boyd, CEO of Multifi. “We have seen demand from our SMB clients for seamless, fast, cost-effective international payment capabilities, so we looked for the perfect partner to make this a reality.”

 

1Konto expands platform to enhance liquidity in key fiat currencies

Digital asset trading firm 1Konto has announced enhancements to its 1KPrime platform designed to elevate liquidity to USD levels for major fiat currencies and digital assets. This includes pairing with stablecoins USDC, USDT and cryptocurrencies like BTC and ETH. 

In a statement, 1KPrime said its role extends beyond liquidity provision, positioning itself as a comprehensive partner for entities engaged in multi-currency transactions. The platform facilitates connection with core digital asset use cases, offering a blend of services tailored to the specific needs of its clients.

The platform includes access to global currencies, including EUR, GBP, AUD, CAD, CHF, JPY, MXN, NZD, SEK and ZAR. Its integrated trading services combine liquidity, multi-asset settlement and institutional access. In addition to global expansion opportunities and enhanced risk management, the firm says that its platform enables corporate treasuries to manage foreign currency conversions more efficiently than traditional banking institutions.