Monex | Today’s CPI release saw headline inflation rise from 2.2% in March to 3.4% YoY in April. The print was marginally higher than expectations, which sat at 3.2%, but despite the figure exceeding the Bank of Canada’s 2% target, it won’t cause concern among the Governing Council just yet. This is because base effects had a large part to play in the increase in the 12-month figure as prices…
Aneeka Gupta (WisdomTree) | The current earnings season sheds plenty of light on the outlook for global equity markets. This time last year, the world was thrown into disarray owing to the COVID-19 pandemic. Since then, we have seen lockdowns lifted as vaccination rollouts gather pace. In addition, the gradual resumption of economic activity, stimulative global fiscal plans, and the release of pent-up consumer demand are being reflected in first-quarter earnings results. As a result, the breadth of earnings revisions has been strongest in the US, followed by Japan, Europe while Emerging Markets and China are turning more neutral.
Keith Wade (Schroeders) | Headline CPI inflation rose to 4.2% year-on-year in April the highest level since September 2008. Meanwhile the core measure, which strips out food and energy prices, rose to 3%, a level last seen in 2006. It is unlikely that the inflation figures will spook the Federal Reserve, although they will mean an upward revision to its forecasts. More importantly, when combined with strong growth in GDP, it will have to start to think about slowing its asset purchases.
Fernando Alberca | Tesla backs down on bitcoin. The electric vehicle manufacturer has suspended the use of bitcoin as a means of payment to buy its products. The reason for this decision was given on Twitter by the CEO of the company himself, Elon Musk, on Thursday May 13 shortly after midnight. “Tesla has suspended the purchase of vehicles with bitcoin. We are concerned about the rapid increase in the…
Crédito y Caución (ATRADIUS) | In October 2019, massive social riots broke out, due to a deep frustration among large parts of the population with growing inequality, rising costs of living and unequal access to public services. One of the protesters’ key demands was to reform the old Pinochet-era constitution, which they argued entrenched inequalities by putting the private sector in control of health, education, housing and pensions. Finally, the…
Farasat Bokhari via The Conversation | The Biden administration has now agreed to back a proposal to suspend intellectual property protection for COVID vaccines. This is a break from US government’s long-held position on strong intellectual property protection, which has also been supported by many research-intensive countries in western Europe as well and the pharmaceutical industry.
Fernando Alberca | Retail customers of hundreds of US banks will soon be able to buy, hold and sell bitcoins directly through their existing accounts at those banks, according to business news outlet CNBC. This will be made possible by a deal between cryptocurrency custody firm New Digital Investment Group (NYDIG) and financial technology giant Fidelity National Information Services (FIS). It will allow US banks to offer cryptocurrency trading and…
Marcus Weston (La Française Group) | Back in June 2020, India’s sovereign credit rating was hit by a double downgrade. First, Moody’s lowered its rating from Baa2 to Baa3. Two weeks later, Fitch lowered its own BBB- India rating outlook, also from stable to negative. Given that the COVID outbreak was one of the catalysts of the June 2020 rating actions, there has understandably been rising market concern that the catastrophic growth in COVID cases on the subcontinent in recent weeks could now trigger the downgrade of India below its critical investment grade status.
JINYUE DONG & LE XIA (BBVA Research) | The PBoC started to exit the above easing measures in May 2020 when the Covid-19 pandemic got controlled in mainland China. Historically, the exit of easing monetary measures in the post-crisis time has always been a global challenge to central banks. China is not an exception in this respect. In February 2021, the normalization progress in China led to the gyration of the interbank interest rate in February 2021, just before the Chinese Lunar New Year as the investors’ fear of the authorities’ fast tightening climbed to a new high.
Intermoney | The progress made in the economic recovery has prompted the Bank of Canada to reduce net purchases of Canadian government debt by 1,000 thousand. CAD 1,000 billion to CAD 3,000 billion as of next week. A move that was supported by a very positive forecast for the world economy, projecting global GDP growth of 6.8% in 2021, 4.1% in 2022 and 3.3% in 2023.