Azad Zangana (Schroders) | Today’s is a major milestone election for Germany, and many will be keeping a close eye on the outcome. In any case, though we should see the results soon, negotiations to form the next coalition are likely to take several months given the potential wide range of combinations on offer. The new chancellor may not be inaugurated before 2022.
Fernando González Urbaneja | In colloquial language, the word “carajal” is understood as a synthesis of a mess, a tangle, confusion: all in one. And there is no better definition for the issue of electricity prices. This is occupying the media so much that they are unable to explain the reality. In turn, this is worrying the government so much that it is afraid it has stepped on a mine…
J.P. Marín Arrese | Jay Powell was crystal clear in Jackson Hole about his willingness to scale down QE starting by the year close. As the US economy is recovering at full steam and prices skyrocket to a 13-year record, the idea that monetary policy will soon switch from the current over-loose stance to a more neutral one is hardly surprising. His message even sounded dovish as he cautioned against rushing into fighting inflation. He considered its current upsurge temporary, however, dismissing this upsurge might poise an…
Antoinette Tyller (European Views) | The EU is calling upon all major economies to increase efforts to combat climate change. The call came in a blog published today by High Representative of the EU for Foreign Affairs and Security Policy, Josep Borrell. The last weeks have seen a series of extreme weather events including severe flooding in Germany and Belgium, and wildfires in Greece, Turkey and Sicily where temperatures yesterday…
By Timothy Rich, Bridget Beavin, Ian Milden, Olivia Blackmon via Fair Observer | Since the federal mínimum wage was introduced in the United States in 1938, it has provided a level of security for workers to be able to afford a minimal living standard. However, the minimum wage of $7.25 an hour has not changed since 2009, the longest timespan without an increase in its history. Critics argue that $7.25…
Many poor countries lost market access in the first half of 2020 with the arrival of the pandemic, forcing them into pro-cyclical austerity. Since then, and up to the end of last May, the IMF had provided unconditional financing to 78 countries to the tune of $109.6 billion. But the bulk of the assistance will come in August, when the IMF’s board of governors approves an allocation of $650 billion…
James Barrineau (Schroders) | Emerging market bonds and currencies sustained serious damage in the 2013 “Taper Tantrum”, but are much better placed this time around. Some financial markets have reacted as if Federal Reserve (Fed) Chair Jay Powell rang the bell for tapering of easy financial conditions at the 16 June policy meeting. Investors have naturally dusted off the playbook from the last episode, the notorious “Taper Tantrum” that began…
Matthias Fawer & Thomas Trsan ( Vontobel AM) | If oil greases the wheels of the global economy, water helps to make its turbines spin. The amount of water used in industrial processes may be less publicized than the “blue gold’s” significance for planting crops, but it is no less significant. Earlier this year TSMC, one of the world’s largest manufacturers of electronic chips based in drought-hit Taiwan, had to resort to water imports to maintain production. Whilst crude oil and its derivatives are part of a well-established industry that may be past its peak, water and its varieties – green, blue, grey, or any other color – may still have surprises in store for us.
Irene Lauro (Schroders) | While climate change is affecting all regions around the world, global warming and precipitation rates will not be distributed evenly around the globe. There will be winners and losers. The effects of climate change – and what it could cost investors – will vary significantly around the world.
Garth Heutel, Givi Melkadze & Stefano Carattini via The Conversation | In 2008, as big banks began failing across Wall Street and the housing and stock markets crashed, the nation saw how crucial financial regulation is for economic stability – and how quickly the consequences can cascade through the economy when regulators are asleep at the wheel. Today, there’s another looming economic risk: climate change. Once again, how much it harms economies will depend a lot on how financial regulators and central banks react.