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Low Real Interest Rates Support Asset Prices, But Risks Are Rising

A large and sudden jump in real interest rates could lead to a further selloff in stocks.



By Nassira Abbas and Tobias Adrian 

A large and sudden jump in real interest rates could lead to a further selloff in stocks.

Supply disruptions coupled with strong demand for goods, rising wages and higher commodities prices continue to challenge economies worldwide, pushing inflation above central bank targets.

To contain price pressures, many economies have started tightening monetary policy, leading to a sharp increase in nominal interest rates, with long-term bond yields, often an indicator of investor sentiment, recovering to pre-pandemic levels in some regions such as the United States.

Investors often look beyond nominal rates and base their decisions on real rates—that is, inflation-adjusted rates—which help them determine the yield on assets. Low real interest rates induce investors to take more risks.

Despite somewhat tighter monetary conditions and the recent upward move, longer-term real rates remain deeply negative in many regions, supporting elevated prices for riskier assets. Further tightening may still be required to tame inflation, but this puts asset prices at risk. More and more investors could decide to sell risky assets as those would become less attractive.

Differing outlooks

While shorter-term market rates have climbed since central banks’ hawkish turn in advanced economies and some emerging markets, there is still a sharp difference between policymakers’ expectations of how high their benchmark rates will rise and where investors expect the tightening will end.

This is most obvious in the United States, where Federal Reserve officials project that their main interest rate will reach 2.5 percent. That’s more than half a point higher than what 10-year Treasury yields indicate.

This divergence between markets and policymakers’ views on the most likely path for borrowing costs is significant because it means investors may adjust their expectations of Fed tightening upward both further and faster.

In addition, central banks might tighten more than they currently anticipate because of persistent inflation. For the Fed, this means the main interest rate at the end of the tightening cycle might exceed 2.5 percent.

Implications of the rate-path divide

The path of policy rates has important implications for financial markets and the economy. As a result of high inflation, real rates are historically low, despite the recent rebound in nominal interest rates, and are expected to remain so. In the United States, long-term rates are hovering around zero while short-term yields are deeply negative. In Germany and the United Kingdom, real rates remain extremely negative at all maturities.

Such very low real interest rates reflect pessimism about economic growth in coming years, the global savings glut due to aging societies, and demand for safe assets amid higher uncertainty exacerbated by the pandemic and recent geopolitical concerns.

The unprecedented low real interest rates continue to boost riskier assets, notwithstanding the recent upward move. Low long-term real rates are associated with historically elevated price-to-earnings ratios in equity markets, as they are used to discount expected future earnings growth and cash flows. All things being equal, monetary policy tightening should trigger a real interest rate adjustment and lead to higher discount rate, resulting in lower stock prices.

Despite the recent tightening in financial conditions and concerns about the virus and inflation, global asset valuations remain stretched. In credit markets, spreads are also still below pre-pandemic levels despite some modest widening recently.

After an exceptional year supported by solid earnings, the US equity market started 2022 with a steep retreat amid high inflation, uncertainty about growth and weaker earnings prospects. As a result, we expect that a sudden and substantial rise in real rates could cause a significant drop for US stocks, particularly in highly valued sectors such as technology.

Already this year, the 10-year real yield has increased by nearly half a percentage point. Stock volatility soared on greater investor nervousness, with the S&P 500 down more than 9 percent for the year and the Nasdaq Composite measure tumbling 14 percent.

Impact on economic growth

Our growth-at-risk estimates, which link future economic growth downside risks to macrofinancial conditions, could increase substantially if real rates rise suddenly and broader financial conditions tighten. Easy conditions helped global governments, consumers, and businesses withstand the pandemic, but this could reverse as monetary policy tightens to curb inflation, moderating economic expansions.

In addition, capital flows to emerging markets could be at risk. Stock and bond investments in those economies are generally seen as being less safe, and tightening global financial conditions may cause capital outflows, especially for countries with weaker fundamentals.

Looking ahead, with persistent inflation, central banks face a balancing act. All the while, real interest rates remain very low in many countries. Monetary policy tightening must be accompanied by some tightening of financial conditions. But there could be unintended consequences if global financial conditions tighten substantially. A higher and sudden increase in real interest rates could lead potentially to a disruptive price revaluation and an even larger selloff in stocks. As financial vulnerabilities remain elevated in several sectors, monetary authorities should provide clear guidance about the future stance of policy to avoid unnecessary volatility and safeguard financial stability.

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Canada NewsWire
LONDON, ON, May 19, 2022

Indiva Launches New Consumer Brand Indiva Life and Remains the National Market Share Leader in the Edibles Category
LONDON, ON, May 19, 2022 /CNW/ – Indiva Limited (…




Canada NewsWire

Indiva Launches New Consumer Brand Indiva Life and Remains the National Market Share Leader in the Edibles Category

LONDON, ON, May 19, 2022 /CNW/ - Indiva Limited (the "Company" or "Indiva") (TSXV: NDVA) (OTCQX: NDVAF), the leading Canadian producer of cannabis edibles and other cannabis products, is pleased to announce its financial and operating results for the first fiscal quarter ended March 31, 2022. All figures are reported in Canadian dollars ($), unless otherwise indicated. Indiva's financial statements are prepared in accordance with International Financial Reporting Standards ("IFRS"). For a more comprehensive overview of the corporate and financial highlights presented in this news release, please refer to Indiva's Management's Discussion and Analysis of Financial Condition and Results of Operations for the Three Months Ended March 31, 2022, and the Company's Consolidated Financial Statements for the Three Months Ended March 31, 2022 and 2021, which are filed on SEDAR and available on the Company's website,

"We are pleased to report very strong year-over-year revenue growth in the first quarter of 2022, and continued gross margin improvement compared to fiscal 2021. According to data from Hifyre Inc., Indiva continues as the dominant national market share leader in edibles," said Niel Marotta, President and Chief Executive Officer of Indiva. "Looking forward, we have many new products and brands to introduce in 2022, as we leverage our distribution across all 13 provinces and territories in Canada. Specifically, Indiva will continue to delight its customers and clients and drive margin-accretive top line growth in 2022 with the introduction of Grön Pearl gummies and Grön Pips candy-coated chocolates, Dime Industries Vapes, as well as new edible and extracts products to be listed under our new in-house consumer brand 'Indiva Life'. We will launch new edible and extract products in Q2 and in the second half of 2022 under the Indiva Life brand, which will come to market as a result of Indiva's own in-house innovation."

Quarterly Performance
  • Gross revenue in Q1 2022 at $9.7 million, representing a 6.6% sequential decrease from Q4 2021, and a 41.2% increase year-over-year from Q1 2021.

  • Net revenue in Q1 2022 was $8.95 million, representing a 5.4% sequential decrease from Q4 2021, and a 43.8% increase year-over-year from Q1 2021, driven primarily by higher sales of category leading edibles including Wana Sour Gummies and Bhang Chocolate, offset by seasonal impacts and lower non-edible revenue.

  • Net revenue from edible products grew to $8.5 million, up 3% from $8.2 million in Q4 2021 and up 54% from $5.5 million in the prior year period. Edible product sales represent 95% of net revenue in Q1 2022.

  • Gross profit before fair value adjustments, impairments and one-time items improved year-over-year, but declined sequentially, to $2.7 million, or 30.0% of net revenue, versus 31.7% in Q4 2021 and 19.0% in Q1 2021. The decline in gross margin percentage sequentially was due to additional labour required in processing, higher shipping costs, lower overhead absorption on goods sold in the quarter, and some returns of product, which are more one-time in nature, as it related to past contract manufacturing agreements. The Company expects margins to improve in the second half of 2022 as new automation for production and packaging comes online.

  • In Q1 2022, Indiva sold products containing 54.3 million milligrams of distillate, the active ingredient in edible products, which represents a 10% decrease when compared to the 60.4 million milligrams in product sold in Q4 2021, and a 84% increase compared to 29.4 million milligrams sold in Q1 2021. The sequential decline was a function of lower sales due to seasonality and mix shift away from multi-pack SKUs.

  • Impairment charges in the quarter totaled $0.85 million. This impairment includes a write off of aged finished goods and bulk cannabis as well as certain packaging for contract manufacturing arrangements no longer in place, offset by a recovery on oil-based products which continue to sell. The Company will continue to work to monetize any impaired inventory which remains saleable.

  • Operating expenses in the quarter decreased 14% sequentially, representing 39.2% of net revenue, versus 43.0% in Q4 2021 and 35.9% in Q1 2021. Operating expenses declined due to lower general and administrative costs, including lower professional fees and lower research and development costs, offset by higher marketing costs and sales commissions.

  • Adjusted EBITDA improved sequentially in Q1 2022 to a loss of $0.33 million, versus a loss of $0.49 million in Q4 2021, due to lower sales and margins offset by lower operating expenses. Q1 2022 improved versus a loss of $0.51 million in Q1 2021, driven by higher sales and improved margins. See "Non-IFRS Measures", below.

  • Comprehensive net loss of $3.0 million included one-time expenses and non-cash charges for impairment of inventory and property, plant and equipment totaling $1.1 million. Excluding these charges, comprehensive loss declined to $2.0 million versus an adjusted loss of $2.3 million in Q4 2021 and $1.5 million in Q1 2021.
Operational Highlights for the First Quarter 2022
  • Indiva achieved national distribution, across all 10 provinces and 3 territories, adding a supply agreement with Nunavut in Q1 2022.

  • The OCS accepted four Grön Pearl gummie listings, with initial deliveries expected in July 2022.

  • Two new SKUs were launched under the Jewels brand. The cannabis tarts, available in Strawberry and Raspberry 1:1 flavours, are perfect for micro dosing at 1 mg per tablet.

  • Indiva launched Bhang THC Toffee and Salt Milk Chocolate in BC.

  • Wana Quick Midnight Berry launched in Ontario, BC and Alberta, and experienced strong sell-in, quickly becoming one of the most popular CBN products in the country. Indiva also introduced two additional gummie SKUs nationally, including under the Wana Quick brand, Lemon Cream and Island Punch.

  • Indiva launched a new craft cultivar called Platinum Jelly by Stinky Greens, under the Artisan Batch brand.
Events Subsequent to Quarter End
  • Dime Industries ("Dime"): Indiva signed an exclusive licensing and manufacturing agreement with Dime. The agreement has a five year term which automatically renews for three additional five year terms. Indiva intends to launch Dime's proprietary and innovative vape products, including disposable vapes, 510-thread carts and custom batteries beginning in Q3 2022, marking Indiva's first entrance into the vape category.

  • Awards: Artisan Batch was awarded Best in Grow from Cannabis NB for best Indica flower, namely Sour Glue, produced by Purplefarm Genetics.

  • Indiva launched additional SKUs subsequent to quarter end including Wana Passion Fruit and Artisan Batch Mimosa Live Rosin.

  • Indiva introduced its new consumer brand Indiva Life at the 2022 Lift&Co conference. The initial cannabis products to be launched under the Indiva Life brand will include edibles, extracts and pre-rolls, all of which have received preliminary acceptance from provincial wholesalers.

  • Indiva continues to receive strong interest in new product and SKU offerings from provincial wholesalers. In the most recent OCS product call, Indiva submitted 42 new SKUs for listing including Grön Pearl Gummies and Pips candy-coated chocolates, Dime Vapes, Indiva Life edibles, extracts and pre-rolls, as well as new Artisan Batch flower and pre-rolls.
Market Share
  • Sell through data from Hifyre Inc. for the first quarter of 2022 shows strong sell-through of Indiva edible products. With 34.2% share of sales, Indiva continues to lead in the #1 market share position in the edibles category:
    • Ontario: #1 with 33.1% market share.

    • Alberta: #1 with 32.8% market share.

    • British Columbia: #1 with 41.5% market share.

    • Saskatchewan: #1 with 21.5% market share.

    • Manitoba: #1 with 37.1% market share.

    • Wana™ Sour Gummies led the edibles category, with 28.0% category share, and 37.6% sub-category share, and Bhang® continued to lead the chocolate category with 34.8% sub-category share.

    • Product Ranking in Q1 2022 showed the top 6 of the Top 10 edible SKUs are from Indiva, led by Wana Pomegranate Blueberry Acai.

    • Based on Hifyre Inc. data from British Columbia, Alberta, Ontario, Manitoba and Saskatchewan, the edibles category declined very slightly in Q1 2022 to $51.2 million in retail sales from a record $51.8 million in Q4 2021.
  • The Company expects Q2 2022 net revenue to be higher sequentially, driven by new product introduction and continued strength in our core products. In the second half of the year, the Company expects robust sequential and year-over-year growth, due to the introduction of several new products and SKUs including, Pearls gummies, Pips candy-coated chocolates, Dime Industries vape products, as well as new Indiva Life branded products, resulting from in-house innovation, namely Double-Stuffed Vanilla Cookies and Double Stuffed Fudge Cookies, as well as Wild Cherry THC Lozenges and Lemon THC Lozenges.

  • Margins are expected to benefit in the second half of 2022 due to the implementation of automation in the production and packaging of edible products. The Company expects to deliver on its commitments for existing or new listings of products, despite some delays in receiving equipment due to global COVID-19-related lockdowns.

  • Indiva also expects to continue to introduce additional craft cannabis flower SKUs under the Artisan Batch brand, with special focus on high THC potency, robust terpene content, premium buds and fresh harvest dates.

Three months ended

March 31

(in thousands of $, except gross margin %

and per share figures)



Gross revenue



Net revenue



Gross margin before fair value adjustments

and impairments



Gross margin before fair value adjustment

and impairments (%)



Loss and comprehensive loss



Adjusted EBITDA[1]



Earnings per share – basic and diluted



Comprehensive earnings per share – basic

and diluted



See "Non-IFRS Measures", below.

Operating Expenses

Three months ended

March 31

(in thousands of $)



General and administrative



Marketing and sales



Research and development



Share-based compensation



Depreciation of property, plant

 and equipment



Amortization of intangible




Expected credit loss



Total operating expenses



Separately, the Company announces that the board of directors of the Company has approved the grant of an aggregate of 222,222 restricted share units ("RSUs") to a certain consultant pursuant to its amended and restated omnibus incentive plan (the "Plan").

All of the RSUs will vest on the one year anniversary of the date of grant. Each vested RSU will entitle the holder thereof to receive a cash payment equal to the closing price of the common shares of the Company on the last trading date prior to the vesting date, or at the discretion of the board of directors of the Company, one common share of the Company or any combination of cash and common shares.


Government and private entities are still assessing the present and future effects of the COVID-19 pandemic. Indiva has continued to operate with enhanced health and safety protocols in place to protect its employees. The Company continues to assess the customer, supply chain, and staffing implications of COVID-19 and is committed to making continuous adjustments to minimize disruption and impact. Indiva will remain proactive in its response to the pandemic and compliant with any and all provincial and/or federal policy enacted to protect Canadians.

CONFERENCE CALL - Thursday, May 19, 2022 at 8:30 a.m. (EST):

The Company will host a conference call to discuss its results on Thursday, May 19, 2022 at 8:30 a.m. (EST). Interested participants can join by dialing 416-764-8658 or 1-888-886-7786. The conference ID number is 53550245.

A recording of the conference call will be available for replay following the call. To access the recording please dial 416-764-8691 or 1-877-674-6060. The replay ID is 550245#. The recording will remain available until Sunday, June 19, 2022.


Indiva sets the standard for quality and innovation in cannabis. As a Canadian licensed producer, Indiva produces and distributes award-winning cannabis products nationally, including Bhang® Chocolate, Wana Sour Gummies, Slow Ride Bakery Cookies, Jewels Chewable Tablets, Ruby® Cannabis Sugar, Grön edibles, Dime IndustriesTM vape products, as well as capsules, edibles, extracts, pre-rolls and premium flower under the INDIVA, Indiva Life and Artisan Batch brands. Click here to connect with Indiva on LinkedIn, Instagram, Twitter and Facebook, and here to find more information on the Company and its products.


Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) has in any way passed upon the merits of the contents of this news release and neither of the foregoing entities accepts responsibility for the adequacy or accuracy of this news release or has in any way approved or disapproved of the contents of this news release.

Certain statements contained in this news release constitute forward-looking information. These statements relate to future events or future performance. The use of any of the words "could", "intend", "expect", "believe", "will", "projected", "estimated" and similar expressions and statements relating to matters that are not historical facts are intended to identify forward-looking information and are based on the parties' current belief or assumptions as to the outcome and timing of such future events. Actual future results may differ materially. In particular, this news release contains forward-looking information relating to, among other things, (i) the Company's outlook for and expected operating margins and future financial results, (ii) the projected growth of its business and operations (including existing and new segments thereof), and the future business activities of, and developments related to, the Company within such segments after the date of this news release, including the anticipated introduction of new product offerings (iii) the Company's ability to capture and/or maintain its market share in any jurisdiction, and (iv) the Company's ability to deliver on its commitments for existing or new listings of products. Various assumptions or factors are typically applied in drawing conclusions or making the forecasts or projections set out in forward-looking information. Those assumptions and factors are based on information currently available to the Company, and include, without limitation, assumptions about the Company's future business objectives, goals, and capabilities, the cannabis market, the regulatory framework applicable to the Company and its operations, and the Company's financial resources. Although the Company believes that the assumptions underlying, and the expectations reflected in, forward-looking statements in this news release are reasonable, it can give no assurance that such expectations will prove to have been correct. A number of factors could cause actual events, performance or results to differ materially from what is projected in the forward-looking statements. Specifically, readers are cautioned that forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company, as applicable, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements, including, but not limited to, risks and uncertainties related to: (i) the available funds of the Company and the anticipated use of such funds, (ii) the availability of financing opportunities, (iii) legal and regulatory risks inherent in the cannabis industry, (iv) risks associated with economic conditions, (v) dependence on management, (vi) public opinion and perception of the cannabis industry, (vii) risks related to contracts with third-party service providers, (vii) risks related to the enforceability of contracts, (viii) reliance on the expertise and judgment of senior management of the Company, and ability to retain such senior management, (ix) risks related to proprietary intellectual property and potential infringement by third-parties, * risks relating to the management of growth and/or increasing competition in the industry, (xi) risks associated to cannabis products manufactured for human consumption, including potential product recalls, (xii) risks related to the economy generally, and (xiii) risk of litigation.

The forward-looking information contained in this news release is made as of the date hereof and the Company is not obligated to, and does not undertake to, update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by applicable securities laws. Because of the risks, uncertainties and assumptions inherent in forward-looking information, investors should not place undue reliance on forward looking information. The foregoing statements expressly qualify any forward-looking information contained herein.

This news release contains future-oriented financial information and financial outlook information (collectively, "FOFI") about the Company's prospective results of operations, which are subject to the same assumptions, risk factors, limitations, and qualifications as set out in the above paragraph. FOFI contained in this news release was approved by management as of the date of this news release and was provided for the purpose of providing further information about the Company's future business operations. The Company disclaims any intention or obligation to update or revise any FOFI contained in this news release, whether as a result of new information, future events or otherwise, unless required pursuant to applicable law. Readers are cautioned that the FOFI contained in this document should not be used for purposes other than for which it is disclosed herein.

Non-IFRS Measures

This news release makes reference to certain non-IFRS measures. These measures are not recognized measures under IFRS, do not have a standardized meaning prescribed by IFRS, and are therefore unlikely to be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement those IFRS measures by providing further understanding of our results of operations from management's perspective. Accordingly, these measures should not be considered in isolation nor as a substitute for analysis of our financial information reported under IFRS.

The non-IFRS measure used in this news release includes "Adjusted EBITDA". The Company calculates Adjusted EBITDA as a sum of net revenue, other income, cost of inventory sold, production salaries and wages, production supplies and expense, general and administrative expense, and sales and marketing expense, as determined by management. Adjusted license fee eliminates 50% of the fee which is equivalent to the Company's share of the joint venture company to which the license fee is paid. Adjusted EBITDA is provided to assist readers in determining the ability of the Company to generate cash from operations and to cover financial charges. Management believes that Adjusted EBITDA provides useful information to investors as it is an important indicator of an issuer's ability to generate liquidity through cash flow from operating activities and equity accounted investees. Adjusted EBITDA is also used by investors and analysts for assessing financial performance and for the purpose of valuing an issuer, including calculating financial and leverage ratios. The most directly comparable financial measure that is disclosed in the financial statements of the Company to which the Non-IFRS measure relates is income (loss) from operations.

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Weekly investment update – The soft underbelly of hard inflation data

Warnings by the US and Chinese authorities have underscored the dilemma of conflicting inflation and growth data, with energy and tight labour markets…




Warnings by the US and Chinese authorities have underscored the dilemma of conflicting inflation and growth data, with energy and tight labour markets pushing up producer and consumer prices amid creeping signs of softening growth. This has put global monetary policy, and markets in risky assets, in a bind.

The Dow Jones Industrial Average fell for the seventh consecutive week last week, while the benchmark US Treasury 10-year yield hovered around 3.0% (almost double the 1.6% of a year ago). Commodity prices came under selling pressure as risk aversion among investors mounted. Safe-haven flows pushed up the US dollar, driving its trade-weighted index to near two-decade highs (see Exhibit 1).

Policy warnings…

China fanned market worries early last week, with Premier Li Keqiang warning that the domestic jobs situation was getting ‘complicated and grave’. The country’s zero-Covid policy is taking a heavy toll on the local economy with negative spillover effects globally. While Shanghai’s lockdown may be wound down soon, other major cities (including Beijing) are facing renewed restrictions.

US Federal Reserve Chair Jerome Powell issued a warning mid-week: The Fed could not guarantee a ‘soft landing’ as it looked to get runaway inflation back to its 2% target amid a tight US labour market. The US Senate nonetheless overwhelmingly confirmed Powell for a second term, signalling monetary policy continuity.

Earlier in the week, former Fed Chair Ben Bernanke warned about the risk of stagflation in an interview with The New York Times.

Aggravated by hard inflation data…

US consumer price inflation was 8.3% YoY in April, down slightly from 8.5% in March. However, core inflation (which excludes food and energy prices), rose on the month from 0.3% to 0.6%, a level still too high for the Fed’s comfort.

Services inflation was particularly strong, rising by 0.7% MoM in April, marking the biggest monthly gain since August 1990. Underscoring continued robust consumer demand, retail sales rose by 0.9% vs the prior month, though this marks the third month in a row that the growth rate has decelerated. 

The prospects for inflation to fall back to the Fed’s 2% target anytime soon may not be good: High wage growth – hourly earnings rose at around 5% YoY – could continue to fuel inflation in the near term. We note that services inflation tends to be much stickier than other index components.

From the Fed’s perspective, these price pressures could in turn drive inflation expectations higher.

The market perceives the latest inflation report as sealing a 50bp rate rise at the June and July meetings of Fed policymakers. It also boosts the chances of the Fed persisting in its aggressive tightening stance at later meetings. A key question is the extent to which – and when – higher interest rates will hit real incomes and crimp demand growth, slowing the economy overall. 

The high services inflation data also suggests labour market tightness would have to ease significantly to bring wage growth back to levels that are acceptable to the Fed. We believe something will have to give. If not, the Fed may have to tap harder on the brakes down the line.

The ECB continues to move closer towards a hawkish policy, with the market now expecting its asset purchasing programme (APP) to end in July, to be followed by a 25bp rate rise soon after. Underpinning the ECB’s policy tightening stance is strong inflation, which rose by 7.4% YoY in April (same as in March), and falling unemployment (the jobless rate hit a record low of 6.8% in March).

The war in Ukraine has added to the upside risks to inflation via food and energy price increases and supply bottlenecks. In addition to higher inflation, the ECB also appears to be concerned about the spillover effects from wage increases. An increasing number of policymakers has spoken out recently in favour of an initial rate rise as soon as July.

And creeping signs of slower growth

Indications of weakening growth momentum have appeared, most noticeably in the UK where GDP growth contracted unexpectedly by 0.1% MoM in March.

In the eurozone, industrial production shrank by 1.8% MoM in March and manufacturing output was down by 1.6%. The main culprit was disruption caused by the war in Ukraine. The weakness was concentrated in Germany, whose supply chains are more integrated with eastern Europe. Its car sector is missing components produced in Ukraine.

Even in the US, recent data showed signs of slowing growth. Jobless claims filings showed an increase in initial claims; the May Senior Loan Officer Opinion survey recorded a drop in demand for mortgages; the University of Michigan consumer sentiment May index hit its lowest level since the start of the pandemic; and the May Empire State Manufacturing survey plunged.

China also released weak data, with industrial output, fixed-asset investment and retail sales all showing year-on-year declines. The property market’s woes deepened, with new home sales and starts falling precipitously.

Investment implications

Mr. Bernanke’s warning of stagflation underscores the dilemma facing policymakers and financial markets: Inflation and growth data are sending conflicting signals. Parts of the US yield curve are inverted, pointing to some risk of an economic recession.

The slowdown concerns are linked to inflation forcing the Fed to tighten policy into restrictive territory and turning weaker growth into a contraction.

The situation is similar in the eurozone: inflation is at its highest ever and could lead the ECB to take stronger measures, exacerbating headwinds from weak Chinese activity and a Russia-induced energy supply shock.

Against the backdrop of the continuing Ukrainian conflict and prolonged supply-chain disruptions, we do not favour sovereign bonds and European equities at this point. We prefer commodities, Japanese and emerging market equities, including Chinese stocks.


Please note that articles may contain technical language. For this reason, they may not be suitable for readers without professional investment experience.

Any views expressed here are those of the author as of the date of publication, are based on available information, and are subject to change without notice. Individual portfolio management teams may hold different views and may take different investment decisions for different clients. The views expressed in this podcast do not in any way constitute investment advice.

The value of investments and the income they generate may go down as well as up and it is possible that investors will not recover their initial outlay. Past performance is no guarantee for future returns.

Investing in emerging markets, or specialised or restricted sectors is likely to be subject to a higher-than-average volatility due to a high degree of concentration, greater uncertainty because less information is available, there is less liquidity or due to greater sensitivity to changes in market conditions (social, political and economic conditions). Some emerging markets offer less security than the majority of international developed markets. For this reason, services for portfolio transactions, liquidation and conservation on behalf of funds invested in emerging markets may carry greater risk.

Writen by Chi Lo. The post Weekly investment update – The soft underbelly of hard inflation data appeared first on Investors' Corner - The official blog of BNP Paribas Asset Management, the sustainable investor for a changing world.

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PopPay Platform Expands To Government-Backed Digital Currency

PopPay Platform Expands To Government-Backed Digital Currency
PR Newswire
PASADENA, Calif. and NASSAU, The Bahamas, May 19, 2022

For First Time Ever, Consumers Can Use Their Face To Make Purchases With A Central Bank Digital Currency



PopPay Platform Expands To Government-Backed Digital Currency

PR Newswire

For First Time Ever, Consumers Can Use Their Face To Make Purchases With A Central Bank Digital Currency

PASADENA, Calif. and NASSAU, The Bahamas, May 19, 2022 /PRNewswire/ -- PopID and SunCash announced today that for the first time in history, consumers can now use the PopPay face verification platform to purchase goods and services with a central bank digital currency (CBDC) – digital money issued and backed by a government. Bahamian consumers can now link their SunCash account to PopPay to enable face pay transactions using their Sand Dollars. They can then spend the digital currency at a network of SunCash merchants using just their face for authentication. Various local and global brands are or will be accepting digital Sand Dollars authenticated by PopPay through the SunCash platform.  

"PopPay's cutting edge technology provides a more consumer-friendly, seamless, and secure experience for SunCash's users," said Desmond Pyfrom, CEO of SunCash.  The existing apps for transacting in digital Sand Dollar generally require consumers' use of smart phones, QR codes, or various other codes to complete a transaction at the point of sale. "With the integration of the PopPay platform into the SunCash App, Bahamian consumers can now quickly, efficiently, and safely use the digital Sand Dollar to purchase food and other products even if the consumer does not have a functional smart phone or an internet connection," said Pyfrom, as is the case for thousands of Bahamians.1

The world is quickly moving towards central bank digital currencies—accelerated by the Covid-19 pandemic and the growth of cryptocurrencies. As of 2022, fourteen countries have launched CBDCs, or are in advanced pilots, and approximately 90 countries, accounting for over ninety percent of global GDP, are considering issuing CBDCs, according to the Atlantic Council.

The Bahamas was the first country to launch a CBDC when it deployed the Sand Dollar nationwide in October 2020. As part of that program, a limited number of supervised financial institutions were authorized to sponsor a mobile payment wallet for the digital dollar of the Bahamas. SunCash was one of the supervised financial institutions approved by the Central Bank of The Bahamas.

"The PopPay platform is designed to allow consumers to link any payment method to their face, including credit cards, debit cards, direct bank transfers, stablecoins, and CBDCs," said John Miller, CEO of PopID and Chairman of its holding company, Cali Group.  "With governments around the world increasingly implementing CBDCs to replace physical cash, PopPay serves the critical policy objective of ensuring that all people can transact with the currency."

"We applaud SunCash for its deployment of this solution that allows Bahamians to transact in Sand Dollar using only their face," said John Rolle, Governor of the Central Bank of The Bahamas. "Such security features are important to increasing personal comfort around the use of digital payments and advancing the Central Bank's goal of increasing financial inclusion among all segments of our society."

A face pay option is an important feature for any country with the goal of increasing financial inclusion with the adoption of a CBDC, as those that are unbanked, under-banked, or without smartphones or reliable internet tend to be the most vulnerable parts of society.

Keith Russell of AD+ECH GLOBAL facilitated the partnership between PopID and SunCash.

About PopID
PopID provides a comprehensive platform, PopPay, for revolutionizing digital interactions and payments using facial verification. PopPay gives consumers the option of identifying themselves in the most natural way possible – with their face – for ordering and payment – enabling more personalized, secure, and streamlined experiences. To learn more about PopPay, visit

About SunCash
SunCash is the largest digital payments, mobile money, and e-commerce service provider in The Bahamas. SunCash's proprietary technology provides financial solutions to all segments of society, including the banked, underbanked, and un-banked Bahamians, as well as non-resident populations in The Bahamas. SunCash has over 55,000 active wallet customers, accounting for approximately 1/7th of the total population of The Bahamas, and more than 1,000 merchants who accept SunCash payment solutions. Customers can also access SunCash services online, through the SunCash App, at local stores, or from more than 100 kiosk locations throughout The Bahamas. SunCash is licensed by both the Central Bank and Securities Commission of The Bahamas. To learn more about SunCash, visit

Diane Zuniga 
Golin (for PopID); (909) 510-0433 

1 Simon Kemp, "Digital 2022: The Bahamas" (Kepios 2022),


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