Monex Europe | Recent meeting minutes and speeches have made it clear the FOMC is considering a range of possible calendar and outcome-based forward guidance. The likeliest outcome is further formalisation of the Fed’s shift away from viewing maximum employment as a constraint that will lead to rate hikes. Powell’s speech may provide a template for what outcome based guidance could look like.
Daniel Wagner | China’s footprint in global foreign direct investment has increased notably since the launch of the Belt and Road Initiative (BRI) in 2013. That served to bring Chinese overseas FDI closer to a level that one would expect, based on the country’s weight in the global economy. However, China actually invested more in countries outside the BRI during the period, given that Chinese investment in developed countries tends to have larger market values, particularly for mergers and acquisitions.
While the new bonds may continue to benefit from a weak US dollar and the lower-for-longer global rate environment, the challenging economic outlook and ongoing uncertainty around the IMF talks will likely cap the yield compression potential.
Nigel William Crawford and Jim Buttery via The Conversation | This pause in the trials doesn’t necessarily mean it’s not safe. Rather, it indicates the testing is progressing as it should, with due consideration of safety. In a sense, this is what phase 2 and 3 clinical trials are designed for — to pick up any potential safety issues and investigate them further.
Just Eat, one of the UK’s leading online food delivery platforms, has added cryptoasset payment options for its France subsidiary. The company has partnered with cryptocurrency payment provider Bitpay to allow its users to pay in bitcoin. The move means Just Eat users will now be able to order food from across 15,000 restaurants in France and pay using bitcoin…
It will take three years for global oil demand to recover from Covid to its new normal assuming we have a vaccine or a cure. According to estimates from BoA Global Research, long term oil demand will peak at 105 million barrel/day by 2030 on electric car proliferation, and then decline to 95 mn bd by 2050. If heavy vehicles also switch to alternative fuel, electric or more likely hydrogen, demand could drop to 76 mnb/d by 2050.
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.
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.