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Euro touches eight-month low as European shares fall

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LONDON – The euro hit an eight-month trough against the dollar on Wednesday and German bond yields were at record lows ahead of inflation data expected to boost the case for further European Central Bank policy easing.

Investors were also awaiting a statement from the Federal Reserve following its policy meeting that some expect to signal a more hawkish policy outlook, and data likely to show the U.S. economy bouncing back strongly in the second quarter.

European shares dipped after French oil major Total (TOTF.PA) was hit by concerns over its investments in Russia following Tuesday’s tightening of European sanctions on Moscow after the downing of an airliner in neighboring Ukraine.

The euro fell to $1.3395, its lowest since November 2013, before recovering to $1.3400, down around 0.1 percent on the day EUR= after data showing Spanish consumer prices fell 0.3 percent in July from a year before.

The surprisingly big fall came even though figures released at the same time showed Spanish economic growth hit its fastest since before the financial crisis in the second quarter.

Traders said that if German inflation data, due at 1200 GMT (8.00 a.m. EDT), also came in below forecast, it would intensify pressure on the ECB to print money to support growth and avert deflation risks. ECONES ECONDE

The ECB cut all its interest rates in June and promised up to 1 trillion euros in cheap long-term loans to banks from September, but kept the door open to a program of large-scale asset purchases, known as quantitative easing (QE).

“The likelihood that the ECB will need to do QE at the end of the year is sharply increasing,” said Alessandro Giansanti, senior rate strategist at ING.

DIVERGING FORTUNES

The contrast between the moribund euro zone economy and an increasingly robust U.S. recovery is one factor in the dollar’s rise this week to a six-month high against a basket of six major currencies. The dollar index was last at 80.225 .DXY, after touching 81.245 on Tuesday as the euro cratered.

The Commerce Department is expected to report on Wednesday that the economy grew at a 3.2 percent annual pace in the second quarter, after it shrank 2.9 percent in the previous quarter.

Federal Reserve chair Janet Yellen is not due to hold a news conference after the U.S. central bank’s two-day meeting, and the Fed will not update its economic forecasts, leaving a statement scheduled for release at 1800 GMT as investors’ focus.

On Friday, the Labor Department’s key nonfarm payrolls report is expected to show a rise of 231,000 jobs in July after an increase of 288,000 in June. The jobless rate is expected to hold steady at 6.1 percent.

With U.S. unemployment dropping over the last few months and inflation firming, some believe the Fed could adjust its wording to suggest a willingness to hike interest rates sooner rather than later as the bank approaches its “full employment” mandate.

The yield on the benchmark 10-year U.S. Treasury note US10YT=RR stood at 2.467 percent, not far from its U.S. close of 2.462 percent on Tuesday, when it got support from German, Italian and Spanish government debt yields hitting record lows.

“That widening yield spread differential is beginning to weigh more heavily on the euro,” said Lee Hardman, a currency economist at the Bank of Tokyo-Mitsubishi UFJ.

RUSSIAN SANCTIONS

European shares bucked the upward trend in Asian markets. French oil major Total TOTF.PSA slid after saying it had stopped buying shares in Russia’s Novatek (NVTK.MM) on the day a Malaysia Airlines flight was downed over Ukraine.

Last April, Total forecast that Russia would become its biggest source of oil and gas output by 2020 thanks to its partnership with Novatek and their Yamal LNG project in Siberia.

Tuesday brought further European and U.S. sanctions against Russia over Moscow’s support for rebels in eastern Ukraine.

The FTSEurofirst 300 .FTEU3 index of top European shares was down 0.2 percent at 1,370.92 points, after gaining 0.3 percent on Tuesday.

Asian shares touched a six-and-half-year peak, with Japan’s Nikkei stock average .N225 ending up 0.2 percent, as upbeat earnings offset weaker-than-expected industrial production data which cast doubts over the strength of an expected third-quarter economic recovery.

U.S. crude CLc1 edged up around 0.1 percent on the day to $101.07 a barrel after touching an intraday low of $100.37 on Tuesday, its lowest since mid-July.

Spot gold XAU= was steady at $1,299 an ounce after slipping 0.5 percent and breaking below the key $1,300 level in the previous session.

– REUTERS

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Tesla Aims for 2028 Commercial Production of Flying Car

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Tesla has set a 2028 commercial production date for its new Roadster sports car that can briefly rise into the air using rocket technology.

According to CNN, the date was revealed when the manufacturers demonstrated its functionality on Thursday at a SpaceX testing facility in Texas, United States, where the two-seater vehicle performed a series of manoeuvres, including driving upside down before making a short airborne movement.

The prototype was operated without a driver during the test, with Musk saying the decision was taken “to make sure we don’t kill anyone.”

“Success is not guaranteed. I mean that. It’ll probably work, but if it doesn’t work, we’re at a safe distance,” he said.

READ ALSO: 2027 Election: ‘Your Future Is More Valuable’ — IGP Warn Youths Against Political Violence

CNN reported that the vehicle uses 10 nozzles and high-pressure air tanks to generate thrust, with Musk claiming it could accelerate from zero to 60 miles per hour in less than a second.

The Tesla boss attributed the development to cooperation between the electric vehicle manufacturer and SpaceX, the rocket company he also leads.

He described the project as “the results of what happens when you have a collaboration with the world’s best car company and the world’s best rocket company.”

Musk also sought to assure spectators that the demonstration was genuine, saying, “We need an audience to prove that it’s not AI or SI. So you guys can tell people you saw it with your eyes, because what you see with your eyes, you will not believe.”

Despite the display, questions remain about whether the vehicle can achieve sustained flight and how practical it would be for everyday transportation.

Roger Conner, curator for vertical flight at the Smithsonian’s National Air and Space Museum, told CNN that combining the requirements of road vehicles and aircraft presented significant engineering challenges.

“Aircraft are extremely sensitive to weight, whereas with ground vehicles you want them to have bumpers and crumple zones and all that,” he said.

“Inevitably, something that is a hybrid between the two is going to be a poor performing aircraft and a poor performing vehicle, and also quite expensive,” he added.

Conner questioned whether the demonstration amounted to flying in the conventional sense.

“We’re not talking about sustained flight. We are literally talking about hopping,” he said.

However, Jim Dukhovny, chief executive of flying car startup Alef, said the technology was achievable, while pointing to the difficulties involved in making such vehicles transition safely from vertical take-off to forward flight.

“It absolutely is 100% feasible,” he told CNN.

“That being said, the hardest part on all eVTOLs, and for us, it’s a transition from (rising) vertical to (moving) forward. It needs to be extremely careful, making sure you do not lose lift, and making sure it’s very stable,” he added.

CNN also reported that Alef’s prototype weighs about 254 pounds, uses eight propellers and is designed to carry one person.

Musk said Tesla intended to begin production of the new Roadster in 2028.

CNN reported that the latest display adds to Musk’s ambitions to push Tesla’s vehicle technology beyond conventional electric cars, although the prototype’s ability to operate as a practical flying vehicle has yet to be established.

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Marketers Eye Portion of FG’s Petrol Discount

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The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) has urged the Federal Government to add its member-stations to the petrol discount programme.

It cautioned that the current arrangement could limit the reach and deny vast consumers in underserved communities the benefits of the 30-day discount window.

The PETROAN also urged the FG to allocate at least 30 percent of the discounted petrol volume to outlets operated by its members.

READ ALSO: Tanzania Nears Completion of $42bn Equinor, Shell-Led LNG Project

The calls followed last week’s announcement by the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, of a petrol discount at Nigerian National Petroleum Company Limited (NNPC Ltd) retail outlets, with priority given to public transport operators nationwide.

According to the National Publicity Secretary, Independent Petroleum Marketers Association of Nigeria (IPMAN), Chinedu Ukadike, the exclusion of independent marketers could undermine the programme’s effectiveness, particularly in communities where NNPC retail outlets have limited presence.

He argued that independent marketers, with their extensive nationwide distribution networks, were better positioned to extend the benefits of the intervention to consumers in remote and underserved areas.

“Independent oil marketers have over 90 percent coverage and presence in the nooks and crannies of this country. You are giving NNPC that is situated only in the town. So how do the poor masses, whom you intend to ensure that this petroleum product will alleviate their sufferings, how would they now get it?” Ukadike asked.

He said the association was not opposed to the government’s policy but insisted that independent marketers should be included to ensure wider access to the discounted product.

“But it’s government policies; we are not against government policies, but let it be all-inclusive; let independent marketers be part of it,” he said.

Ukadike also urged the government to extend the discount period to 60 days, citing logistical challenges that could delay the movement of petrol from coastal depots to other parts of the country.

“And the 30 days should be extended to 60 days. Because of the circulation of petroleum products, most times it takes two weeks for a truck to leave Apapa and get to Gombe, Maiduguri, because of the bad road and all the rest of them and loading process,” he added.

Similarly, PETROAN National President, Billy Gillis-Harry, urged the Federal Government to allocate 30 per cent of the discounted petrol volume to the association’s retail outlets to facilitate broader national distribution.

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Tanzania Nears Completion of $42bn Equinor, Shell-Led LNG Project

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In the bid to transform Tanzania into the East African regional energy hub, the country is on the verge of concluding an agreement with a consortium of energy companies, including a $42 billion LNG project.

It was gathered that the project is designed to tap the 47.13 tcf of gas discovered in Tanzania’s deep offshore fields, part of the country’s estimated 57.54 tcf in total discovered reserves, the sixth-largest in Africa, behind Nigeria, Algeria, Senegal, Mozambique and Egypt.

READ ALSO: Shell Identifies Keys to Nigeria’s Energy Future

Equinor and Shell would be the lead operators, alongside involvement from ExxonMobil Pavilion Energy and Medco Energi, while state oil major, the Tanzania Petroleum Development Corporation (TPDC), would also hold an equity stake in the project.

“It’s almost there,” Khamis Mussa Omar, Tanzania’s finance minister, told Reuters.

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