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Elvira Nabiullina, Russia's central bank governor.

Andrey Rudakov | Bloomberg | Getty Images

Elvira Nabiullina, Russia’s central bank governor.

Russia’s central bank held its key interest rate at 7.75 percent on Friday in line with market expectations, but said it could consider cutting rates as early as June.

Analysts polled by Reuters this month had unanimously expected the central bank to hold the rate for a third consecutive board meeting this year.

“If the situation develops in line with the baseline forecast, the Bank of Russia admits the possibility of turning to cutting the key rate in Q2-Q3 2019,” the central bank said in a statement.

The bank had initially predicted that inflation would peak at 5.5 percent before slowing to its 4 percent target next year. But inflation, the main economic indicator it tracks, has been slightly lower than expected, hitting 5.3 percent last month.

The central bank, which has said that two rate hikes last year seemed sufficient to curb rising consumer prices, said that inflation had passed its peak last month.

Expectations that the central bank will cut rates later this year have fuelled demand for OFZ government bonds in recent months because investors are eager to purchase the papers before their prices increase proportionally to a potential future cut.

The rouble was unchanged against the dollar from a level of 64.83 seen just ahead of the central bank’s decision.

The April rate decision is considered as interim because it is not followed by a news conference by Elvira Nabiullina, governor of the central bank.

The next rate-setting meeting, scheduled for June 14, will be followed by a news conference at which Nabiullina will shed more light on the central bank’s monetary policy.

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Australia’s former prime minister Bob Hawke dies at 89



Former Australian Prime Minister Bob Hawke skulls a cold beer during day two of the Fifth Test match in the 2017/18 Ashes Series between Australia and England at Sydney Cricket Ground on January 5, 2018 in Australia.

Mark Evans | Getty Images

Bob Hawke, a transformative and charismatic left-wing lawmaker with a “larrikin” streak who served as Australian prime minister from 1983 to 1991, died on Thursday aged 89, his family said.

“Today we lost Bob Hawke, a great Australian — many would say the greatest Australian of the post-war era,” his wife and former biographer Blanche d’Alpuget said in a statement.

While others may have struggled to dismiss a reputation for boisterous, if well-meaning, behaviour, silver-haired Hawke said it helped him win favor with working-class voters.

Prime Minister Scott Morrison hailed Hawke’s ability to speak to all Australians.

“Bob Hawke was a great Australian who led and served our country with passion, courage, and an intellectual horsepower that made our country stronger,” he said on social media.

Hawke’s death comes ahead of a Saturday general election, with his opposition Labor party is narrowly ahead in the polls.

“The Australian people loved Bob Hawke because they knew Bob loved them, this was true to the very end,” Labor party leader Bill Shorten said in a statement.

Hawke earned his reputation as a “larrikin,” or loveable rogue, in part due to his world record for drinking a “yard”, or 1.4 litres, of beer in 11 seconds while at Oxford University.

Robert James Lee Hawke, a former trade union leader, was first elected to parliament in 1980 and was named leader of the centre-left Labor Party less than a month before a snap general election in 1983.

Voters embraced Hawke and Labor won an unlikely landslide against a conservative government led by Malcolm Fraser, who had been in power for nearly a decade. Hawke became Australia’s 23rd prime minister.

“I regard Bob Hawke as the best Labor prime minister this country has ever had,” former conservative leader John Howard, who served as Fraser’s treasurer, said this year.

Inheriting an economy languishing in recession and with double-digit unemployment and inflation, Hawke embraced economic deregulation that belied his connections with Australia’s largest trade unions.

Hawke won support from the political left to float the Australian dollar, remove controls on foreign exchange and interest rates and lower tariffs on imports within months of his inauguration.

The reforms triggered a wave of economic growth, allowing Hawke to introduce universal healthcare, strengthen social security for poor families and enact stronger environmental legislation.

Efforts against apartheid

Within months of Hawke becoming prime minister, Australia won sailing’s America’s Cup in 1983, ending 132 years of U.S. dominance over the oldest trophy in world sport.

Hawke led the celebrations, famously sticking up of anyone who might over-do the revelry, declaring on television: “Any boss that sacks a worker for not turning up is a bum.”

Australia also made its mark on the international stage under Hawke, who shifted diplomatic priorities away from Britain, fostering closer ties with the United States, China, Japan and Southeast Asia.

He also spearheaded international efforts to impose economic sanctions on South Africa over apartheid.

Hawke was riding high in opinion polls by the mid-1980s and won re-election in 1987 despite an economic downturn.

He won a fourth election in 1990 to become Australia’s longest-serving Labor prime minister but his popularity began to wane amid a recession.

Paul Keating, Hawke’s treasurer and the architect of Labor’s economic policies, pressured him to step aside as his position weakened.

However, with no sign that Hawke would retire, Keating challenged him for the leadership in 1991. Hawke saw off the first challenge but eventually lost to Keating a few months later in a party-room coup.

He quit politics three months later.

Hawke divorced his wife of nearly 40 years, Hazel Masterson, after leaving politics and public life and married his biographer, Blanche d’Alpuget. He appeared as a media commentator and was in demand as a public speaker.

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Starbucks’ China challenger Luckin Coffee will likely price IPO at high end of range or above



A barista packs a coffee for online sales at a Luckin Coffee store in Beijing, China July 17, 2018.

Jason Lee | Reuters

Luckin Coffee will price its initial public offering at $17 per share, sources with knowledge of the deal told CNBC on Thursday. The company will also upsize its IPO to 33 million shares, according to a source.

The Chinese coffee company’s expected range was $15 to $17 per share, according to a regulatory filing last week. Luckin plans to list Friday on the Nasdaq under the ticker “LK.”

In its most recent funding round, the Beijing-based chain was valued at $2.9 billion.

“Not since the dotcom bubble of 1999-00 has a company achieved a $3 billion public valuation less than two years after its launch,” said Kathleen Smith, a principal at Renaissance Capital, which tracks and invests in IPOs.

With 2,370 stores open at the end of the first quarter and plans to add 2,500 this year alone, Luckin is trying to overtake Starbucks as the biggest coffee chain in China. Since it was founded less than two years ago, the company has tried to build a customer base with smaller locations formatted for convenience and offering steep discounts.

In 2018, the chain reported net sales of $125.3 million and a net loss of $241.3 million. To cover its losses and pay for its ambitious expansion plans, Luckin has raised $550 million so far, according to Crunchbase.

“As a result, the key controversy is whether Luckin can generate sales in the absence of discounts,” Bernstein analyst Sara Senatore wrote in a research note last week.

China is one of Starbucks’ long-term growth markets, along with the U.S. The global coffee giant, which is celebrating its 20th year in China, wants customers to treat its stores as a third place — the spot aside from home and work where consumers hang out and relax. The Seattle-based company has tried to meet Chinese customers’ eagerness for convenience by partnering with Alibaba to deliver its drinks.

Starbucks saw transactions at stores in China open at least a year fall 1% during its second quarter, meaning that traffic was declining. But customers were spending more, leading to same-store sales growth of 3%.

Starbucks’ stock, which has a market value of $95.8 billion, is up 22% so far this year.

CEO Kevin Johnson has said the company’s rivals in China are focused on short-term gains, while Starbucks is using a long-term strategy.

“Some of those competitors are competing through heavy, heavy discounts that we don’t believe are sustainable,” Johnson said recently on CNBC’s “Squawk on the Street. “

Luckin’s debut will not only depend on how investors view its ability to compete with Starbucks, but also current market conditions. Recent escalations in the trade war between China and the U.S. have led to market volatility as investors brace for a new round of tariffs.

So far this year, 54 companies have raised $20 billion in the U.S. IPO market, with Uber’s debut responsible for about 40% of that number, according to Renaissance Capital data. Uber and rival ride-hailing giant Lyft have struggled since their debuts, but the rest of this year’s newly public companies are doing well. Of the year’s IPOs, 63% are trading above their IPO price, Smith said.

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Wall Street, US-China trade, currencies in focus



Shares in Asia were higher in Friday morning trade following overnight gains on Wall Street as investors stateside cheered strong earnings and economic data.

The Nikkei 225 in Japan added 0.71% in early trade, while the Topix index rose 0.57% as most sectors gained. Shares of Sony surged more than 7% after the company announced a $1.83 billion share buyback.

In South Korea, the Kospi gained 0.3%. Australia’s ASX 200 also added 0.85%.

Asia-Pacific Market Indexes Chart

Overnight on Wall Street, the major indexes closed higher for a third straight day. The Dow Jones Industrial Average added 214.66 points to close at 25,862.68. The S&P 500 rose 0.9% to finish its trading day at 2,876.32, while the Nasdaq Composite closed 1% higher at 7,898.05.

The gains stateside came on the back of better-than-expected earnings and U.S. economic data. Housing starts for April topped expectations while weekly jobless claims dropped more than expected.

Those developments offset concerns over the ongoing trade war between Washington and Beijing.

Investors had largely priced in the two economic powerhouses to reach a deal this month. Instead, the U.S. hiked tariffs on $200 billion worth of Chinese imports. China retaliated with higher tariffs on $60 billion worth of goods.

To exacerbate matters, U.S. President Donald Trump declared on Wednesday a national emergency over threats against American technology. In addition, the U.S. Department of Commerce announced the addition of Huawei Technologies and its affiliates to the Bureau of Industry and Security (BIS) Entity List, making it more difficult for the Chinese telecom giant to conduct business with U.S. companies.

The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 97.840 after bouncing from levels below 97.5 yesterday.

The Japanese yen traded at 109.82 against the dollar after rising from levels below 109.5 in the previous trading session. The Australian dollar was at $0.6888 after touching highs above $0.692 yesterday.

Oil prices increased in the morning of Asian trading hours, with the international benchmark Brent crude futures contract gaining 0.18% to $72.75 per barrel, while U.S. crude futures added 0.38% to $63.11 per barrel.

— CNBC’s Fred Imbert contributed to this report.

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