Front month ICE US Cocoa prices have risen close to 25% in between 12th and 19th November 2020. It’s a strange occurrence given that demand for cocoa has generally been weak in the COVID-19 pandemic era. Grinding data both in US and Europe highlight this weakness. So what’s going on?
Michael Klein via The Conversation | Going back to a gold standard would create new problems. For example, the price of gold moves around a lot. A year ago an ounce of gold cost $1,457. The pandemic helped drive up the price by 40% to $2,049 in August. As of Nov. 18, it was about $1,885. Clearly, it would be destabilizing if the dollar were pegged to gold when its prices swings wildly. Exchange rates between major currencies are typically much more stable.
Amnesty International | G20 leaders attending this weekend’s virtual summit hosted by Saudi Arabia must take the Saudi authorities to task for their shameless hypocrisy on women’s rights, Amnesty International said today. Women’s empowerment features prominently on Saudi Arabia’s G20 Agenda, despite the fact the activists who spearheaded campaigns for women’s rights are languishing in jail or facing trial.
Sean MarKowicz (Schroders) | The economic fallout of Covid-19 has wreaked havoc for income-seeking investors. Across the globe, interest rates have tumbled to record lows and equity dividends have been drastically cut.For example, this year dividends per share are expected to fall by 16% to 36% across the globe compared with 2019, with the UK and emerging markets (EM) among the worst affected regions. This has left investors nursing losses from normally dependable sources of income.
Intermoney | The data supports the fact that China is the star pupil in the world economy and fits in with the possibility it will have growth of 2% in 2020 and close to 8% in 2021.These figures are synonymous with an upward economic influence which the Chinese will use to achieve greater global scale. Xi Jinping is committed to this strategy by offering the world, or rather countries that opt for a “constructive” relationship with China, the Asian giant’s ability to import $22 Tr in goods over the next 10 years.
Adam Vettese (eToro) | Cryptoasset backers and analysts are increasingly divided over the outlook for Bitcoin amid the ongoing surge in its price. Bitcoin jumped above $16,000 this week amid news of another vaccine against coronavirus, this time from Moderna.
The free trade agreement signed this weekend by 15 Asia-Pacific nations, led by China and Japan, will apply to a total population of 2.2 billion and a total GDP of 26.2 trillion, about a third of the world economy. It will also mean a 65% tariff reduction. Definetely, the RCEP (Regional Comprehensive Economic Partnership) further strengthens the growing political and economic influence of China in the region.
Daniel Broby via The Conversation | In a surprise last minute decision, the flagship stock exchange listing of Ant Group was suspended by regulators in China and Hong Kong. The Chinese tech giant, backed by Alibaba billionaire Jack Ma, was to be the biggest initial public offering (IPO) in history. The suspension puts in doubt the future of the US$34.4 billion share sale, part of the US$313 billion dual listing of this giant financial technology (fintech) payments company.
Mondher Bettaieb Loriot / Claudia Fontanive-Wyss (Vontobel AM) | The recovery takes hold now that a Covid-19 vaccine is on the immediate horizon. Pfizer has announced that they, together with BIoNTech, are the first drugs-makers to achieve credible positive readings on the effectiveness of their Covid-19 vaccine trials. The recovery stage is generally the sweet spot for corporate bonds and credit spreads as corporates further increase cash flows, act for the benefit of bondholders and, in the end, reduce leverage.
The impact of the coronavirus pandemic has put an end to the modest economic rebound since 2017. The recovery followed Brazil’s longest and deepest recession in 2014-2016, when GDP shrank by almost 9%. However, Brazil’s less stringent containment measures and stronger fiscal support have led to smaller output losses compared to most other countries in the region. In 2020 GDP is expected to contract by 4.6% (an upward revision from the 6.2% contraction expected in August). Business confidence has rebounded since June.