Russia's plans to finalise a gas pipeline deal with China hits a stalemate, largely due to Beijing's demands on price and supply. Japan's factory activity expands for the first time in a year in May. South Korea's factory activity also shows strong growth, expanding at its fastest pace in two years in May. Tiktok prepares a clone of its app’s core recommendation algorithm. Skydance Media revises its offer for acquiring non-voting shares of Paramount. US personal expenditures data sparks hopes of the Federal Reserve delivering rate cuts in September. All this and much more on the June 3 version of World Street.
Unfruitful talks
According to the Financial Times, Russia's efforts to finalise a significant gas pipeline agreement with China have hit a snag due to what Moscow perceives as Beijing's impractical terms on pricing and supply quantities. The report, citing sources, indicates that China proposed paying rates close to Russia's domestically subsidised prices. Furthermore, China was only willing to commit to purchasing a small portion of the pipeline's intended annual capacity of 50 billion cubic meters of gas.
Glimmer of hope
The latest set of US core personal consumption expenditures price data, which the Fed uses to as a measure for underlying price pressures came in-line with expectations, rising 0.2 percent in April from March. This was lower than the 0.3 percent increase in the month prior, suggesting that consumer spending had softened in April.
The positive PCE data sparked hopes that price pressures might not be as sticky as anticipated and might prompt the Federal Reserve to deliver the first set of rate cuts in September. After the data, traders are now factoring in about a 53 percent chance of a rate cut in September according to CME Fedwatch, more than the 49 percent expected before the report.
Back in black
A private-sector survey revealed that Japan's factory activity recorded growth for the first time in a year in May. However, the overall expansion was modest, and demand remained subdued. Additionally, a weak yen led to increased costs for imported items for certain producers.
Japan's Manufacturing Purchasing Managers' Index (PMI) increased to 50.4 in May, up from 49.6 in April. This marks the first time it has surpassed the 50.0 threshold, which distinguishes growth from contraction in activity, since May 2023.
Marching ahead
South Korea's factory activity surged in May at its quickest rate in two years, fueled by robust growth in both output and orders, thanks to growing global demand, a private sector survey showed.
The country's purchasing managers index (PMI) for manufacturers, compiled by S&P Global, climbed to 51.6 in May from 49.4 in April on a seasonally adjusted basis. This marks the highest reading since May 2022, following two consecutive months below the 50-mark, which distinguishes expansion from contraction.
What a clone!
Social media app TikTok is in the process of creating a duplicate of its specifically tailored for its vast user base of 170 million in the US, Reuters reported. The goal behind this cloning is to create a version of the app that operates independently from its Chinese parent company, ByteDance.
This move is seen as a potential strategy to appease American lawmakers who have been advocating for TikTok's ban. ByteDance initiated the work of splitting the source code late last year, a move that was already underway before Congress began pushing for legislation to mandate the sale of TikTok's US operations. This legislation was subsequently enacted into law in April this year.
Revised offer
Skydance Media recently revised its bid for Paramount Global, proposing to purchase a specific quantity of non-voting Paramount shares at $15 apiece, Reuters reported. This revised proposal, as reported by the Wall Street Journal, values Paramount's B-shares at a premium of nearly 26 percent over its previous closing price.
Additionally, another report by Wall Street Journal also stated that a special committee of Paramount's board has agreed to endorse a potential deal following Skydance Media's improved offer.
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