Fears are growing of a ‘bullwhip’ effect across global ports as China eases restrictions in Beijing and Shanghai.
Chinese authorities have relaxed some of the strictest curbs in both cities, meaning factories may soon be able to clear backlogs.
That could cause problems for global logistics as a wave of pent-up demand spills around the world.
Economists have warned China may now miss it growth targets this year, despite major stimulus efforts from Beijing.
08:02 AM
Money round-up
Here are some of the day’s top stories from the Telegraph Money team:
07:39 AM
Kwarteng to confirm audit-reform dilution – Times
Watered-down reforms to the UK’s corporate governance regime – including declawed measures on audit reform – will be confirmed by Business Secretary Kwasi Kwarteng this week, The Times reports.
The paper says:
He is due to confirm that he is not taking forward proposed reforms, modelled on America’s Sarbanes- Oxley Act, under which directors would face bans or fines for signing off inaccurate accounts.
The proposal, first announced more than a year ago, prompted fierce criticism from business lobby groups, which complained that the additional costs would make Britain a less attractive place to establish companies.
07:28 AM
Congestion has been rapidly easing in recent weeks
There are some signs that the wave threatening to crash upon Western ports is already coming. Data from VesselsValue, a maritime intelligence group, shows average waiting times at Shanghai have fallen sharply after a peak in late April.
07:24 AM
Return of Shanghai threatens shipping shock
Shanghai’s reopening isn’t just a demand story – it also signals a potential boom in supply, with the ‘workshop of the world’ open for business again.
As Judah Levine, an analyst at shipping consultancy Freightos wrote in a note last week:
Most in the industry are expecting pent up demand to send a surge of ocean exports towards destination ports like LA/Long Beach when manufacturing in Shanghai rebounds.
As I wrote earlier this month:
07:09 AM
FTSE opens higher as rally continue
The FTSE 100 has opened about 0.4pc higher, extending a rally from last week. US markets are closed today for a holiday but things look fairly calm across equities currently.
06:55 AM
Oil gets twin boosts from China and stalled EU talks
Oil’s break through $120 a barrel follows several weeks of steady gains.
It’s often difficult to pinpoint exactly why something is rising, but there are clear two big factors here:
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China is preparing to reopen Shanghai fully after nearly three months of restrictions. This is expected to cause an upswing in demand as the manufacturing hub ramps up for the season of peak demand (from summer to Christmas).
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EU nations failed to reach a deal at talks on Sunday over banning Russian crude, but a deal (which would cut the West off from Russia oil) is still in the offing according to officials.
06:43 AM
Agenda: Shanghai reopening
Good morning. Brent crude oil has topped $120 per barrel for the first time since March as China prepares to reopen the manufacturing hub city of Shanghai.
The FTSE 100 is set to open 0.4pc higher as a rally across stocks continues.
5 things to start your day
1) How Beijing’s surveillance cameras crept into Britain’s corridors of power Cameras used to monitor Uyghur camps in widespread use across UK schools, hospitals and government buildings.
2) Sunak to forge ahead with ‘NFT for Britain’ despite plunge in markets A market turmoil that has wiped billions of pounds off the digital assets.
3) Electric vehicles should face ‘tyre tax’, says air quality adviser Particulates generated by tyre wear are more dangerous to public health than diesel exhaust fumes – some say.
4) Why Mercedes and Volkswagen’s big bet on the wealthy is at risk of backfiring Luxury car sales reaped huge rewards in the pandemic, but signs suggest the boom won’t last for long.
5) Shanghai scrambles to avoid zero-Covid economic catastrophe China’s biggest port launches stimulus effort after months of severe lockdowns
What happened overnight
Asian markets rose on Monday as investors regained confidence after the release of healthy US data and as China eases some of its strict Covid curbs in Shanghai and Beijing, lifting hopes for the world’s number two economy. Hong Kong put on more than two per cent after a strong Friday performance fuelled by a rally in tech firms, while Tokyo, Sydney, Shanghai, Seoul, Taipei, Manila and Wellington were also well up.
Coming up today
Corporate: No scheduled updates
Economics: Consumer confidence (EU), business climate (EU)
