In August 2020, commodities had their best monthly performance since April 2016 and second-best monthly performance in the past decade (based on the Bloomberg Commodity Total Return Index). Each major segment of commodities contributed positively to the strong performance, led by Energy (+11.2%). Natural gas was the best performer in that segment, with a 47.6% gain.
Eva Cairns (Aberdeen Standard Investments) | Growing numbers of countries, cities and companies have pledged to become net zero by 2050 to meet the goals of the Paris agreement. Estimates suggest, collectively, these net-zero pledges represent nearly 25% of world emissions and 50% of global output.
Abe’s resignation is not good news as it comes at a critical economic, political and social time. The so-called Abenomics failed to address old structural problems and inflation has continued to be a headache, while wages have not risen as strongly as expected. Along with Japan, there are other economies such as Argentina, where past mistakes have been repeated. Current week the country successfully closed the restructuring of its debt in dollars with private creditors, but still have to recover its financial equilibrium.
Johannes Müller Head of Macro Research DWS | Until the Covid-19 virus is finally defeated, the recovery looks set to continue at an uneven pace. In our view, pandemic containment will remain an economic drag for the foreseeable future. Over the course of the summer, we have already seen signs of the initial, V-shaped recovery giving way to a much flatter curve of improving global economic activity. The good news is that most developed countries appear better prepared for potential renewed virus surges in the fall than they were in spring.
In Spain, the increase foreseen by Crédito y Caución reaches 30%, due to the sectorial composition of the economy. The credit insurance company forecasts an increase of 26% in corporate insolvencies worldwide, which will largely materialize during the second half of 2020.
Bitcoin miners saw revenues surge 23% in August as increased transaction volumes fed through to prices, and as the price of Bitcoin remained above $11,000. Coin Metrics data analysed by CoinDesk showed Bitcoin miners generated an estimated $368 million in revenue in August, up from $300 million in July.
Citi GPS | The race to find a vaccine for COVID-19 is on! Competition to find an effective defense against the virus has increased and accelerated the speed of development to a record pace. Six candidates have already reached Phase 3 trials.
Arturo Bris via The Conversation | Stock markets have been very strange this year. For international investors in general, currency risk – above all the weakening of the US dollar – has become the most important financial risk of the year. For a European investor, for example, US markets have yielded about 5% in US dollar terms) in the first eight months of 2020. Translated back into euros, however, that return is 0.5% because of the depreciation of the US dollar over the past two months.
Today’s official resignation of Japan’s PM Shinzo Abe ended weeks of speculation following a number of hospital visits over the past month (…) The two front runners for Prime Minister are probably Shigeru Ishiba (photo) and Fumio Kishida. While neither would be likely be politically revolutionary, Ishiba has been more critical of Abe in the past and was recently quoted saying: “We need to rethink everything about Japan… Stocks are not the whole economy. We need to change the system where all wealth accumulates with stockholders and people who manage companies.” Given his more populist stance it is unsurprising that he is popular, regularly topping public polls for the preferred next PM. Kishida by contrast has been moulded and promoted by Abe himself, and never will the cliché above be more true than if he is chosen to take over from his political mentor.
David Page, Head of Macro Research at AXA Investment Managers | Federal Reserve Chair Powell delivered the first shared address to a (virtual) Jackson Hole Monetary Conference. He delivered the conclusions of the Fed’s Monetary Policy Review, a process that was started in early 2019, and was due to be announced earlier this year, before the pandemic delayed the release. The Review maintained the broad pillars of Fed policy making: a dual mandate with employment and price stability goals, with price stability defined as 2% over the long term. However, it made three changes…