Welcoem to posts!!
in the future - u will be able to do some more stuff here,,,!! like pat catgirl- i mean um yeah... for now u can only see others's posts :c
Thursday 12 August 2021 (10:30 BST) - Some of the key points from the financial news this morning:
== Federal Reserve Kansas President Esther George says the central bank should move ahead with tightening ==
- "Now, with the recovery underway, a transition from extraordinary monetary policy accommodation to more neutral settings must follow,"
- Esther George is not a voting policymaker in 2021.
== IEA downgrades oil forecasts due to the worsening progression of the pandemic, particularly in Asia ==
- If OPEC+ continues to reduce cuts, it could tip the balance into a surplus, which could negatively affect oil prices.
== The Marshallian K indicator suggests that liquidity is reducing even before the Fed begins tapering ==
- This could be a problem for U.S. equities as excess liquidity has been partly responsible for underpinning the rally. This also affects other markets, such as Bitcoin and meme stocks.
- This didn't cause much concern before the 2008 financial crisis. However, since then the central bank has been in "perpetual crisis mode". The S&P500 had a 16% correction in 2010 when the indicator flipped negative, and a similar correction happened in 2018.
- According to research from the UBS, if the Fed stop its annual $1.4 trillion in Q.E., it would result in only a 3% decline in the S&P500.
- During the taper tantrum in 2013, the S&P500 dropped almost 6% but recovered within a week and ended the year up 30%. However, equity valuations are now much higher at 22 times earnings, compared to 15 times in 2013.
- So far, U.S. equity indexes continue to reach new highs, and the liquidity drain has not damaged markets that much. However, fewer stocks are behind the recent rise, which could be caused by falling liquidity.
== UK GDP increased more than expected in June as Covid restrictions continued to be reduced ==
- The economy is now only 2.2% smaller than before lockdowns were introduced. However, the fast recovery is expected to fade, with lost output returning by the end of the year.
- Growth for Q2 is at 4.8%, close to the Bank of England's 5% forecast.
- "Today's figures show that our economy is on the mend, showing strong signs of recovery," - Rishi Sunak.
- In June, the main drivers behind growth were down to a comeback in hospitality and health services, such as social work. However, construction, manufacturing and industrial production saw output fall.
- The removal of restrictions has caused wages to increase and the cost of goods and services, which will feed into inflation. The BoE expects inflation to peak at 4% towards the end of the year.
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Tuesday 10 August 2021 (08:30 BST) - Some of the key points from the financial news this morning:
== Corporate debt from the most Covid affected sectors is struggling with the Delta variant ==
- Bonds from companies like AMC, retailers and cruise companies fell in price last week.
- The spread for high yield bonds has risen to 3.5 percentage points from a low of 3.16 at the start of July.
- The debt of companies already seeing supply chain issues is also being impacted.
== New IPCC report shows global warming is likely to hit 1.5c by 2040 ==
- The report was signed off by 234 scientists from more than 60 countries.
- This is even with a best-case scenario of big cuts to greenhouse gas emissions.
- Even with rapid emissions cuts, temperatures would still rise until at least 2050.
- If emissions can substantially reduce in the 2020s and get to net zero by 2050, temperature rises can still be limited to 1.5c; this is the limit set by G7 in May.
- Saudi Arabia objected to the wording and wanted to change 'carbon emissions' to 'greenhouse gas emissions'.
- Urgent cuts need to be made to methane, which is released through farming and poorly managed gas production.
== UK retailers reported slowest sales growth in 5 months in July ==
- Volume of goods sold in shops and online grew 6.4% in July compared to last year.
- This adds to the case that the UK's economic recovery is slowing down.
- The BRC also said retailers are feeling the effects of Brexit, leading to staff shortages and border frictions that are having an impact.
== Federal Reserve's Raphael Bostic expects tapering to be announced between October to December ==
- He said if the jobs numbers come in higher he would move it forward even more.
- He is in favour of going fast with the tapering and taking a balanced approach on the Treasuries and MBSs.
- He sees the first rate increase coming very late in 2022.
- “We are well on the road to substantial progress toward our goal,” Bostic told reporters after a webinar speech on Monday, calling the addition of 943,000 jobs last month “definitely quite encouraging in that regard. My sense is if we are able to continue this for the next month or two I think we would have made the ‘substantial progress’ toward the goal and should be thinking about what our new policy position should be.”
== US Senate to vote today on the $550 billion infrastructure bill ==
- Once the infrastructure bill gets a vote, Schumer will move quickly to passing a budget resolution that will set the stage for passing the remainder of Biden's economic agenda.
- One of the remaining issues is the proposed rules on cryptocurrencies.
- The bill includes $110 billion for roads and bridges, $73 billion for electric grid upgrades, $66 billion for rail and Amtrak, $65 billion for broadband expansion, $65 billion for clean drinking water and $39 billion for transit.
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Monday 9 August 2021 (08:30 BST) - Some of the key points from the financial news this morning:
== Government infrastructure spending may lead to a construction supercycle ==
- There's likely to be significant cement-intensive spending from late 2022 onwards.
- It could be a long-term supercycle for construction.
- It may not be as big as the supercycle from the 2000s, as that was driven by an unprecedented period of growth in China.
- However, higher prices could offset the impact of government spending
== Aluminium prices are near their highest levels in 10 years ==
- Prices have increased 31% in 2021, reaching a high of $2,615 per tonne
- This year could beat 2010 as the largest annual demand growth in history.
- As well as a huge increase in demand, the prices are rising due to supply constraints too.
- A drought in the Yunnan province in China cut hydropower output and led the government to ask aluminium smelters to reduce their usage. Yunnan was due to account for 50% of global growth in aluminium production between 2020 and 2023.
== Jens Weidmann (president of the German Bundesbank) has warned inflation in the eurozone may rise faster than expected ==
- He is urging the ECB to be careful about the risk that inflation may be too high as well as the risk of it being too low.
- He said the emergency asset purchase programme (PEPP) needs to end once the pandemic is over. "The first P stands for pandemic and not for permanent."
== US CPI likely to have risen at the slowest pace in 5 months in July ==
- According to a Bloomberg survey of economists ahead of this week's data.
- This would show a significant deceleration in inflation.
- The core measure is forecast to rise 0.4% following the 0.9% gain in June that was the largest month-over-month gain since 1982.
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Friday 6 August 2021 (08:30 BST) - Some of the key points from the financial news this morning:
== July NFP expectations ==
- Most forecasts range from 850,000 to 900,000 jobs added.
- The composition of the jobs across sectors will be more valuable to us than the headline numbers, as there may be distortions in certain sectors.
- For example, the shifts in seasonal employment in education. This usually leads to a decline of 1 million jobs in July, but due to the pandemic, many schools are still continuing.
- On 28 July, Jerome Powell had reiterated "I would want to see some strong job numbers" in the coming months before they begin tapering.
- This means the headline number is likely to move the markets, but to anticipate any Fed action we will need to read between the lines and not focus on the headline number.
== US Senate will try to finalise the $1 trillion infrastructure bill on Saturday after failing on Thursday ==
- The bipartisan bill would allow new construction projects throughout the US such as refurbishing or expanding roads, highways, bridges and airports.
- On Thursday they spent hours negotiating but failed to reach an agreement on amendments to the bill, on top of the many they already debated this week.
- Some disagreements include a cryptocurrency provision in the infrastructure bill and a Republican demand for billions of dollars in Defense Department improvements. Some Democrats also feel it doesn't have enough climate measures included.
- The Congressional Budget Office has said the legislation would increase federal budget deficits by $256 billion over 10 years, although lead negotiators claim it will be financed in a way to not need deficit-spending.
- Once this bill is voted on, the Senate is set to start working on the budget framework that will lead to a $3.5 trillion 'human infrastructure' bill later in the year.
== Alternative data showing Delta variant could be holding back parts of US economy ==
- Big companies such as Google, Amazon and BlackRock have delayed plans to return to the office.
- A 'back to work' gauge from Kastle Systems showed a slight decline last week from its peak a week previously. This may just be a blip rather than the start of a real decline.
- Total spending on debit and credit cards declined meaningfully last week. This may be partly noise in general, but a drop in spending on air travel and entertainment could be due to the Delta variant.
- OpenTable restaurant bookings across the US have decelerated in recent months and stayed below 2019 levels, but reservations in virus hot-spot states like Florida and Texas are above comparable 2019 levels.
== Starting salaries in the UK grew at the fastest pace in over 24 years ==
- Employers are having to be competitive to get workers from the tight supply of appropriate candidates.
- Many industries are struggling to fill vacancies in their workforce since Brexit reduced immigration from the EU and the pandemic led workers to look for more secure jobs.
- Vacancies grew at the fastest pace since the survey started in 1997 and the number of people seeking to fill them dropped rapidly.
- The higher salaries required to fill roles could cause inflationary pressure on wages. Wage growth is a key factor in determining if inflation will truly be transitory or not.
Please hit the like button if you found this helpful. Leave a comment with things you've got your eye on today, and have a great day!! 😀
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5 August 2021 (08:30 BST) - Some of the key points from the financial news this morning:
== Total value of the world's negative-yielding debt has exceeded $16.5 trillion ==
- This is the highest in 6 months.
- This goes against what was expected, as a global recovery and rising inflation would typically lead to a rise in yields.
- The biggest moves have come from the US, but Japan and the eurozone also saw moves.
- Although the yields would usually represent a negative outlook (which may be the case based on the spread of the Delta variant), in this case it's more likely to be due to other factors such as the bond purchases by central banks creating an alternative dynamic.
== US may cut back on Treasury sales for the first time in 5 years ==
- The Treasury said that issuance in the coming quarter will stay at $126bn but it expects to propose an initial set of auction size reductions in the November refunding announcement.
- In recent months, no new large-scale spending measures have been authorised by Congress.
- This means continuing the current issuance sizes may provide more borrowing capacity than is needed over the medium to long-term.
== German factory orders beat estimates in June ==
- Demand increased 4.1%, this was driven by domestic orders, with investment goods up 14.8%
- The report suggests momentum will pick up in the coming months even under the current supply strains.
== Treasury Secretary Janet Yellen sees inflation being in line with Federal Reserve targets by the end of this year ==
- She said inflation measured on an annual basis will be high for some time, but she expects by the end of the year the monthly rates will come down to a pace consistent with the Fed's price stability target.
- This would imply monthly readings of 0.1% or 0.2% by December.
- Yellen sticks with the Biden administration view that the rise in inflation is due to the supply bottlenecks.
== Extreme weather in China is another threat to global supply-chain issues ==
- A typhoon alert stopped drop-off services of containers on Tuesday at some Chinese ports.
- Officials predict more typhoons will hit China this month. Between August and December, 16 to 18 typhoons are forecast to form in the Northwest Pacific and South China.
- Global trade has already been affected this year by bad weather.
- Port closures are leading to more containers building up in the backlog which was already struggling.
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