World economy

Jay Powell

Did Powell tame inflation?

J. P. Marín-Arrese | Jerome Powell boasts having curbed the recent inflation flare through resolute tightening of monetary policy.  While the need to perform rate hikes seems obvious, it seems far from evident it stood as the paramount driving force. For, as is now clear, the Fed delivered negative rates throughout the inflationary bout and only undertook lukewarm efforts to drain the excess liquidity fearing the danger of a credit-crunch….


fed powell nov 2023

Fed cuts interest rates by 0.5 points

The Fed has lowered interest rates by 0.5 points, thus aligning with the market, which anticipated a roughly 70% probability of a 50 basis point cut. As a financial institution noted this morning, “the risk for credit markets is that a 50 basis point cut may be interpreted as an emergency measure. Consequently, the gradual approach and soft landing that have benefited this type of asset could be disrupted. On…


Empleo EEUU

US production costs rise 2.4% year-on-year, in line with expectations

Banca March: In the US, industrial production costs rose slightly more than expected on a monthly basis, limiting the possibility of a 50 b.p. cut by the Fed next week. On a month-on-month basis, producer prices rose by 0.2% in August, one tenth of a percentage point higher than expected and two tenths of a percentage point higher than in July. Similarly, if we exclude the more volatile components such…


OHLA pte Luis Amodio

OHLA wins two new contracts in US valued at around €330m

Link Securities | The company has been awarded, through its subsidiaries OHLA Building and OHLA USA, two new projects in the US for a combined value of $350 million (about €330 million), according to the portal Bolsamania.com. The largest contract, valued at $228 million (around €214 million) and awarded to OHLA Building, includes the design and construction of new facilities for the correctional and rehabilitation centre in Miami-Dade County, Florida.


fed powell nov 2023

Most economists polled by Reuters believe Fed will cut rates by 25 bps at each meeting for remainder of year

Link Securities | According to a Reuters poll, a majority of economists surveyed believe that the Federal Reserve (Fed) will cut its policy rate by 25 basis points at each of the three remaining policy meetings this year (September, November and December). Moreover, only nine economists out of 101 surveyed expected a cut of half a percentage point next week, when the Federal Open Market Committee (FOMC) meets, while 92…


china exportaciones

Chinese import growth signals buoyant domestic demand, but exports deteriorate

Bankinter : Trade Balance (August): $91,020M vs. $81,100M expected vs. $84,650M previous. Exports: +8.7% vs. +6.6% expected vs. +7.0% previous. Imports: +0.5% vs. +2.5% expected vs. +7.2% previously. Opinion of Bankinter’s analysis team: Import growth marks a two-year high, reflecting the dynamism of domestic demand, which is increasing this month. However, the sharp slowdown in exports, which were the key to the recovery of GDP in 2Q24, is a negative…


china yuanesCM

China’s price benchmarks show lack of inflationary pressures and encourage deflation risk

Bankinter | August CPI rises to +0.6% year-on-year from +0.5% previously, however, it is a tenth of a percentage point lower than expected. The Underlying Rate rose +0.3% year-on-year in August (up from +0.4% average) and registers the lowest rate since March 2021. (2) August Industrial Prices declined -1.8% year-on-year from -0.8% pre and worse than the expected -1.5% year-on-year. Bankinter’s analysis team’s opinion: The two price references show the…


EEUU deficit comercial

US records largest trade deficit in two years: up +7.9% from previous month to $78.8bn

Intermoney | US foreign trade posted a $78.8 billion deficit in July, which was within our forecast, widening the gap to the highest level in two years, driven by a surge in goods imports. But it also reflected the intention of companies to ensure adequate supply in the face of a possible dock workers’ strike, which led the value of imports of goods and services to rise by 2.1%. And…


EEUU

End of US yield curve inversion: for first time in 26 months, 10-year bond vs. 2-year bond shows positive slope

Banca March: More than two years after the 10-year – 2-year slope began the inversion – the short 2-year sovereign rate was higher than the long 10-year rate – today the US benchmark has a positive slope for the first time. In this case, the inversion of the curve has lasted 26 months, the longest period since the 1980s. Historically, the last six recessions have been preceded by an inversion…


Iberdrola edificio

Qatar’s sovereign wealth fund wants to increase stake in Iberdrola to more than 10% from current 8.69%

Banco Sabadell: According to press reports, the Qatar Investment Authority wants to raise its stake in Iberdrola from the current 8.69% and will seek to allow it to pass 10%. Assessment: Positive news with limited impact pending confirmation. Qatar would continue to hold the largest stake in the company, followed by Blackrock (5.395%) and Norges (3.116%). An increase in Qatar’s shareholding would have no consequences for the management of the…