Archive for Economics & Fundamentals – Page 55

27 Aug

Oil prices jumped amid increased geopolitical risk in the Middle East. Investors focus on the Australian inflation data

By JustMarkets

At Monday’s close, the Dow Jones (US30) Index was up 0.16%, while the S&P 500 (US500) Index was down 0.32%. The NASDAQ Technology Index (US100) closed negative 0.85%.

On Monday, San Francisco Fed Chair Mary Daly said that “the time to adjust policy is now.” Richmond FRB President Barkin said he still sees upside risks to inflation, although he supports “lower” interest rates as the labor market cools. Markets rate the odds of a 25bp rate cut at the September 17–18 FOMC meeting at 100% and a 50bp rate cut at 36%.

Equity markets in Europe were mostly down yesterday. Germany’s DAX (DE40) fell 0.08%, France’s CAC 40 (FR40) closed up 0.18%, Spain’s IBEX 35 (ES35) fell 0.11%, and the UK’s FTSE 100 (UK100) was not trading on Monday. European stocks closed subdued on Monday, weakly holding on to the previous week’s highs, as markets continued to assess the extent to which consolidated expectations of an imminent rate cut by the Federal Reserve will affect European borrowing costs. Ifo’s German business climate indicator fell for the fourth straight time in August, matching market expectations and adding to concerns after preliminary estimates of the economy contracting in the second quarter and reflecting further pessimism among German consumers.

WTI crude oil prices rose more than 3% on Monday, surpassing the $77 a barrel mark, marking the third straight session of gains on concerns about supply risk amid escalating tensions in the Middle East. Over the weekend, intense rocket exchanges between Israel and Hezbollah heightened fears that the wider regional conflict will affect oil supplies. In addition, market sentiment was boosted by expectations of looser monetary policy after Federal Reserve Chairman Jerome Powell hinted at a possible interest rate cut, driven by concerns about the labor market and progress toward the 2% inflation target.

Asian markets were predominantly up yesterday. Japan’s Nikkei 225 (JP225) was down 0.66%, China’s FTSE China A50 (CHA50) added 0.07%, Hong Kong’s Hang Seng (HK50) gained 1.06%, and Australia’s ASX 200 (AU200) was positive 0.76%.

Australia’s consumer inflation report will be released as early as tomorrow. Inflation is expected to fall from 3.8% to 3.4% y/y. Reserve Bank of Australia (RBA) policymakers want to see further declines before abandoning the hawkish bias. Any signs of easing inflationary pressures could have a negative impact on the Australian dollar (AUD), which rose to the highest levels in more than a year amid the RBA’s hawkish stance. RBA chief Michele Bullock recently said that despite signs of weakening inflation, it is “premature” to consider cutting interest rates. Therefore, if consumer prices for July turn out to be worse than expected, it will only strengthen the opinion of policymakers and further support the Australian currency.

S&P 500 (US500) 5,616.84 −17.77 (−0.32%)

Dow Jones (US30) 41,240.52 +65.44 (+0.16%)

DAX (DE40) 18,617.02 −16.08 (−0.086%)

FTSE 100 (UK100) 8,327.78 0 (0%)

USD Index 100.86 +0.14 (+0.14%)

Important events today:
  • – German GDP (q/q) at 09:00 (GMT+3);
  • – US CB Consumer Confidence (m/m) at 17:00 (GMT+3).

By JustMarkets

 

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

Economics & Fundamentals Financial News
27 Aug

Space missions are getting more complex − lessons from Amazon and FedEx can inform satellite and spacecraft management in orbit

By Koki Ho, Georgia Institute of Technology and Mariel Borowitz, Georgia Institute of Technology 

Most space mission systems historically have used one spacecraft designed to complete an entire mission independently. Whether it was a weather satellite or a human-crewed module like Apollo, nearly every spacecraft was deployed and performed its one-off mission completely on its own.

But today, space industry organizations are exploring missions with many satellites working together. For example, SpaceX’s Starlink constellations include thousands of satellites. And new spacecraft could soon have the capabilities to link up or engage with other satellites in orbit for repairs or refueling.

Some of these spacecraft are already operating and serving customers, such as Northrop Grumman’s mission extension vehicle. This orbiting craft has extended the lives of multiple communications satellites.

Northrup Grumman’s mission extension vehicle is one example of a craft designed to service other satellites and spacecraft while in orbit.

These new design options and in-orbit capabilities make space missions look more like large logistics operations on Earth.

We’re researchers who have studied the space industry for years. We’ve studied how the space sector could learn lessons from companies like Amazon or FedEx about managing complex fleets and coordinating operations.

As companies develop satellite constellations as shown in this illustration, they’ll need to repair satellites in orbit.
NOIRLab/NSF/AURA/P. Marenfeld, CC BY-ND

Lessons from the ground transportation network

Space mission designers plan their routes in order to deliver their payloads to the Moon or Mars, or orbit efficiently within a set of cost, timeline and capacity constraints. But when they need to coordinate multiple space vehicles working together, route planning can get complicated.

Logistics companies on the ground solve similar problems every day and transport goods and commodities across the globe. So, researchers can study how these companies manage their logistics to help space companies and agencies figure out how to successfully plan their mission operations.

One NASA-funded study in the early 2000s had an idea for simulating space logistics operations. These researchers viewed orbits or planets as cities and the trajectories connecting them as routes. They also viewed the payload, consumables, fuel and other items to transport as commodities.

This approach helped them reframe the space mission problem as a commodity flow problem – a type of question that ground logistics companies work on all the time.

Lessons from ground logistics infrastructure

New capabilities for refueling and repairing spacecraft in orbit create new opportunities as well as challenges.

Namely, space operators don’t usually know which satellite will be the next one to fail or when that will happen. For these new technologies to be useful, space mission designers would need to come up with an infrastructure system. That could look like a fleet of service vehicles and depots in space that quickly respond to any unpredictable events.

Fortunately, space mission designers can learn from operations on the ground. City planners and emergency response organizations think through these types of challenges while determining where to locate hospitals or fire departments. They also consider these facilities’ capacities to respond to unpredictable calls.

We can draw an analogy between a ground logistics system design and an in-space servicing system design. This way, researchers can leverage theories developed for ground logistics to improve the space mission design practice.

One study published in November 2020 developed a framework for servicing spacecraft on orbit using what logistics experts call spatial queuing theory. Researchers most commonly use this modeling theory to analyze the performance of a ground logistics system.

Lessons from ground warehouse management

In the past, individual spacecraft carried out their missions independently, so if a satellite failed, its mission engineers had to develop and send a replacement.

Now, for missions with multiple satellites, such as the Iridium satellite constellation, operators often maintain one or more spares on orbit.

This becomes complicated for constellations made up of hundreds or thousands of spacecraft. Mission designers want to ensure they have enough spare satellites in orbit so they don’t have to interrupt the mission if one breaks. But sending too many spare satellites gets expensive.

When dealing with these types of large constellations, mission designers can learn from the methods Amazon and other ground companies use to manage their warehouses. Amazon puts these warehouses in specific places and stocks them with certain items to make sure the deliveries are handled efficiently.

Inventory management theories on the ground can help inform how space companies tackle these challenges.

A study published in November 2019 developed an approach that space companies could use to manage their spare strategies. This approach can help them decide where in orbit to allocate their spare satellites to meet their needs while minimizing any service interruptions.

International dimensions

Spacecraft operate in a complex and rapidly changing environment. Operators need to know where other missions are operating and what rules they should follow when refueling or repairing in space. In space, however, nobody has defined these rules yet.

Ships, aircraft and ground vehicles all have clear rules of the road to follow when interacting with other vehicles. For example, civilian ships and aircraft have to share their location with other vehicles and officials to help manage traffic.

Some researchers are examining what similar rules could look like for space. One study examined how developing rules based on a spacecraft’s size, age or other attributes might help future space operations run more smoothly. For example, one rule might be that the spacecraft that launched most recently should take responsibility for maneuvering when there’s another craft in its path.

With more satellites and spacecraft launching now than ever, companies and government agencies will need new technologies and policies to coordinate them. As space activity becomes more complex, researchers can continue to apply what they’ve learned on the ground to new missions in space.The Conversation

About the Author:

Koki Ho, Associate Professor of Aerospace Engineering, Georgia Institute of Technology and Mariel Borowitz, Associate Professor of International Affairs, Georgia Institute of Technology

This article is republished from The Conversation under a Creative Commons license. Read the original article.

 

Economics & Fundamentals Opinions
26 Aug

Powell’s dovish comments support indices’ growth. Silver rises after gold

By JustMarkets

On Friday, the Dow Jones (US30) gained 1.14% (for the week +1.24%), while the S&P 500 (US500) gained 1.15% (for the week +1.39%). The NASDAQ Technology Index (US100) closed positive 1.47% (for the week +1.29%).

Speaking at the Fed’s annual symposium at Jackson Hole on Friday, Fed Chairman Jerome Powell recognized recent progress on inflation and said that “the time has come for policy adjustments.” The chairman noted that the US labor market is cooling rapidly following the release of a softer July employment report and downward revisions to the jobs data. Powell also noted that the FOMC has further strengthened its confidence that inflation is slowing to the 2% target, suggesting it is time to adjust monetary policy toward less tight conditions. In addition, Atlanta Fed President Bostic said late last week that more than one Fed interest rate cut may be needed before the end of the year.

The Canadian dollar rose to 1.35 per US dollar in August, the strongest in five months, as new evidence of the Fed’s dovish stance pressured the US dollar. Fed Chairman Jerome Powell said in a speech that a weak labor market and slowing US inflation require a quick response from the US Central Bank in the form of a less tight monetary policy, which boosted G10 currencies against the US dollar. The urgency in Powell’s rhetoric was enough to offset dovish expectations for the Bank of Canada, which has already begun a cycle of rate cuts to address growth and a moderate labor market domestically. The unemployment rate is holding at 6.4%, the highest in two years, with net employment falling and the lowest labor force participation rate since 1998.

Equity markets in Europe were mostly up on Friday. Germany’s DAX (DE40) gained 0.76% (for the week +1.75%), France’s CAC 40 (FR40) closed higher by 0.70% (for the week +1.77%), Spain’s IBEX 35 (ES35) added 1.09% (for the week +2.82%), and the UK’s FTSE 100 (UK100) closed up 0.48% (for the week +0.20%).

Silver (XAG/USD) traded above $29.5 per ounce in late August, near its highest levels in five weeks, as Federal Reserve Chairman Jerome Powell reinforced hopes of an interest rate cut in September. The US Central Bank is expected to begin easing policy in September, but the market remains divided over the size of the first-rate cut. Overall, traders are pricing in about 100 basis points of rate cuts at the Fed’s three remaining meetings this year. Precious metals also received support from increased safe-haven flows after Hezbollah launched rocket attacks on Israel over the weekend.

WTI crude oil prices rose to around $75.4 a barrel on Monday, rising for a third straight session, driven by concerns over supply risks amid escalating fears of a broader conflict in the Middle East.

Asian markets were mostly up last week. Japan’s Nikkei 225 (JP225) rose by 1.32%, China’s FTSE China A50 (CHA50) added 0.22%, Hong Kong’s Hang Seng (HK50) gained 0.24% over 5 trading days, and Australia’s ASX 200 (AU200) posted a positive 0.66%.

The Australian dollar traded near $0.68, moving towards the strongest levels this year, as the Reserve Bank of Australia’s (RBA) hawkish monetary policy outlook contrasted with dovish signals from the Federal Reserve. Minutes from the RBA’s last meeting showed that the money rate will remain stable for an extended period. RBA Governor Michele Bullock also recently said that despite signs of weakening inflation, it is “premature” to consider cutting interest rates.

In New Zealand, the Reserve Bank (RBNZ) began its easing cycle with a rate cut this month and has announced an upcoming cut. Markets expect aggressive easing before the end of the year, with traders estimating additional quarter-point rate cuts in October and November.

Pavel Durov, the billionaire co-founder and CEO of messaging app Telegram, was arrested at the Bourget airport outside of Paris Saturday evening. According to the report, Durov, 39, was traveling aboard his private jet after arriving from Azerbaijan, which triggered a French search warrant issued by the OFMIN of the French judicial police due to his inclusion in a wanted persons file (FPR). Durov was detained by the National Anti-Fraud Office (ONAF) over the alleged facilitation of various crimes, including terrorism, narcotics trafficking, and fraud. He faces up to 20 years in prison if convicted.

S&P 500 (US500) 5,634.61 +63.97 (+1.15%)

Dow Jones (US30) 41,175.08 +462.30 (+1.14%)

DAX (DE40) 18,633.10 +139.71 (+0.76%)

FTSE 100 (UK100) 8,327.78 +39.78 (+0.48%)

USD Index 100.68 −0.83 (−0.82%)

Important events today:
  • – German Ifo Business Climate (m/m) at 11:00 (GMT+3);
  • – US Durable Goods Orders (m/m) at 15:30 (GMT+3).

By JustMarkets

 

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

Economics & Fundamentals Financial News
23 Aug

The Bank of Japan is set to raise rates further. The Fed gov will speak at the annual symposium in Jackson Hole today

By JustMarkets 

On Thursday, stocks in the US ended the session down. The Dow Jones Index (US30) was down 0.43%, while the S&P 500 Index (US500) fell by 0.88%. The NASDAQ Technology Index (US100) closed negative at 1.67% yesterday. The rise in bond yields on Thursday was negative for stocks. Hawkish comments from Kansas City Fed President Schmid pushed bond yields higher when he said he wanted to see more economic data before supporting any decision to cut interest rates, as demand could rise again if the Fed is not careful. On the other hand, Boston Fed President Colleen said she expects the Fed to begin easing interest rates soon and that a “gradual, methodical pace” of rate cuts would likely be appropriate. Also, Philadelphia Fed President Harker said that he is agreeable to an interest rate cut in September if data align with expectations and that a “slow, methodical approach to lowering rates is the right way to go.”

The US weekly initial jobless claims rose by 4,000 to 232,000, matching expectations. S&P’s US manufacturing PMI fell by 1.6 to 48.0, weaker than expectations of 49.5 and the lowest report in 8 months. US existing home sales for July rose by 1.3% m/m to 3.95 million, slightly stronger than expectations of 3.94 million. Today, markets await Fed Chair Powell’s opening comments at the Fed’s annual symposium in Jackson Hole, Wyoming, for new insights on the Fed’s future policy path. Powell is expected to indicate a willingness to cut rates in September but will not specify the exact timing or size of the cut. Markets rate the odds of a 25 bps rate cut at the September 17-18 FOMC meeting at 100% and a 50 bps rate cut at 25%.

Bitcoin has held its recent rise to above $60,000, hitting its highest levels in three weeks. However, recent data showed that bitcoin inventories held by miners reached the highest level in two years. An increase in bitcoin inventories held by miners has historically been associated with falling prices, suggesting that miners may be preparing to sell large amounts of bitcoin.

Equity markets in Europe mostly went up yesterday. Germany’s DAX (DE40) rose by 0.24%, France’s CAC 40 (FR40) closed down 0.01%, Spain’s IBEX 35 (ES35) added 0.37%, and the UK’s FTSE 100 (UK100) closed upv0.05%. The S&P Eurozone Manufacturing PMI for August from S&P fell by 0.2 to 45.6, weaker than expected. However, the Eurozone Composite PMI for August unexpectedly rose by 1.0 to 51.2, stronger than expectations for a decline to 50.1. The ECB reported that Eurozone wage growth fell to 3.6% y/y in Q2 from 4.7% y/y in Q1. The eurozone consumer confidence index unexpectedly fell by 0.4 to 13.4 in August, weaker than expectations of an increase to 12.6.

The ECB’s July 17-18 policy meeting summary states that “the September meeting was an appropriate time to reassess the level of monetary policy tightening, as new economic data and a new set of staff forecasts will emerge.” Swaps discount the odds of a 25 bps ECB rate cut at the September 12 meeting at 97%.

Asian markets were mostly up yesterday. Japan’s Nikkei 225 (JP225) rose by 0.68% yesterday, China’s FTSE China A50 (CHA50) added 0.35%, Hong Kong’s Hang Seng (HK50) gained 1.44% over yesterday and Australia’s ASX 200 (AU200) was positive 0.21%.

The Bank of Japan (BoJ) reiterated its commitment to raise interest rates if inflation steadily reaches its 2% target but realizes that markets at home and abroad remain volatile, BoJ Governor Kazuo Ueda told parliament on Friday. He added that the central bank continues to monitor market volatility following its decision to raise borrowing costs in July. Ueda emphasized that the BoJ’s stance on adjusting the degree of monetary policy easing has not changed.

Singapore’s annual inflation rate in July 2024 was 2.4%, unchanged from the previous month, the lowest since August 2021, and below market forecasts of 2.5%. The annualized core inflation rate fell to 2.5% from 2.9% in the previous month, the lowest since February 2022, and fell short of forecasts of 2.9%.

S&P 500 (US500) 5,570.64 −50.21 (−0.89%)

Dow Jones (US30) 40,712.78 −177.71 (−0.43%)

DAX (DE40) 18,493.39 +44.44 (+0.24%)

FTSE 100 (UK100) 8,288.00 +4.57 (+0.06%)

USD Index 101.52 +0.48 (+0.47%)

Important events today:
  • – New Zealand Retail Sales (q/q) at 01:45 (GMT+3);
  • – Japan National Core CPI (m/m) at 02:30 (GMT+3);
  • – Singapore Consumer Price Index (m/m) at 08:00 (GMT+3);
  • – Jackson Hole Symposium at 15:00 (GMT+3);
  • – Canada Retail Sales (m/m) at 15:30 (GMT+3);
  • – US Fed Chair Powell Speaks at 17:00 (GMT+3);
  • – US New Home Sales (m/m) at 17:00 (GMT+3);
  • – UK BoE Gov Bailey Speaks at 22:00 (GMT+3).

By JustMarkets

 

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

Economics & Fundamentals Financial News
23 Aug

Banana apocalypse, part 2 – a genomicist explains the tricky genetics of the fungus devastating bananas worldwide

By Li-Jun Ma, UMass Amherst 

Did you know that the bananas you eat today are not the same type as the ones people were eating a few generations ago? The banana you might have had with your breakfast today is a variety called the Cavendish banana, while the one that was in grocery stores up to the 1950s was a variety called Gros Michel, which was wiped out by a disease called Fusarium wilt of banana, or FWB.

FWB of Gros Michel was caused by Fusarium oxysporum race 1, a fungal pathogen that affects bananas. This fungal infection kills a plant by occupying its vascular system, blocking water and mineral transportation.

Plant biologists developed the Fusarium-resistant Cavendish variety to replace the Gros Michel. Yet, over the past few decades, a resurgence of FWB caused by a different strain of the same fungus called tropical race 4, or TR4, is once again threatening global banana production.

How did Fusarium oxysporum gain the ability to overcome resistance and infect so many different plants?

The two-part genome of F. oxysporum

I am a genomicist who has spent the past decade studying the genetic evolution of Fusarium oxysporum. As a species complex, F. oxysporum can cause wilt and root rot diseases in over 120 plant species. Certain strains can also infect people.

In 2010, my lab discovered that each F. oxysporum genome can be divided into two parts: a core genome shared among all strains that codes for essential housekeeping functions, and an accessory genome varying from strain to strain that codes for specialized functions like the ability to infect a specific plant host.

Each species of plant has a sophisticated immune response to defend against microbial invasion. So to establish an infection, each F. oxysporum strain uses its accessory genome to suppress a plant’s unique defense system. This functional compartmentalization allows F. oxysporum to greatly increase its host range.

Petri dish with four red, oblong colonies crowing on separate corners
The genomic structure of Fusarium oxysporum allows it to have a wide range of hosts, such as tomatoes, cucumbers and watermelon.
Edward L. Barnard, Florida Department of Agriculture and Consumer Services, Bugwood.org, CC BY-SA

In our newly published research, my team and colleagues in China and South Africa found that the TR4 strain that kills Cavendish bananas has a different evolutionary origin and different sequences in its accessory genome compared with the strain that killed Gros Michel bananas.

Looking at the interface of where the TR4 strain is battling with its Cavendish banana host, we found that some of its activated accessory genes release nitric oxide, a gas harmful to the Cavendish banana. This sudden burst of toxic gases facilitates infection by disarming the plant’s defense system. At the same time, the fungus protects itself by increasing production of chemicals that detoxify nitric oxide.

Increasing banana diversity

In tracing the global spread of this new version of Fusarium oxysporum, we realized that a major cause for the recent resurgence of this fungal infection is the domination of the international banana industry by a single clone of banana.

Growing different varieties of bananas can make agriculture more sustainable and reduce disease pressure on a single crop. Farmers and researchers can control Fusarium wilt of banana by identifying or developing banana varieties that are tolerant or resistant to TR4. Our findings suggest that another way to protect Cavendish bananas would be to design effective nitric oxide scavengers to reduce the toxic pressure of the gas burst.

The banana industry has dark origins.

It can be hard to imagine how a consumer who simply enjoys eating bananas could participate in the battle against the disease devastating banana crops. However, consumers determine the market, and farmers are forced to grow what the market demands.

You can help increase banana diversity in your supermarket by intentionally trying one or more of the other hundreds of other existing banana varieties when they show up there. You can also buy local varieties of other fruits and agricultural products to help preserve plant diversity and support local growers.

Collaboration among scientists, farmers, industry and consumers around the world can help avoid future shortages of bananas and other crops.The Conversation

About the Author:

Li-Jun Ma, Professor of Biochemistry and Molecular Biology, UMass Amherst

This article is republished from The Conversation under a Creative Commons license. Read the original article.

 

Economics & Fundamentals Opinions
22 Aug

Thailand’s democracy has taken another hit, but the country’s progressive forces won’t be stopped

By Adam Simpson, University of South Australia 

After two tumultuous weeks in Thai politics, the country has a new prime minister and new opposition party in parliament. The sweeping changes have demonstrated yet again the power of the Constitutional Court over Thailand’s fragile democratic institutions.

The political intrigue began on August 7 when the court dissolved the progressive Move Forward Party, the main opposition party in parliament following its surprising showing in the 2023 national elections.

Two days later, the party reconstituted itself as the People’s Party and announced it would continue to lead the opposition.

Then, on August 14, the Constitutional Court disqualified Prime Minister Srettha Thavisin of the Pheu Thai party from holding the post, and removed him from office.

And two days after that decision, the parliament duly elected Pheu Thai leader Paetongtarn Shinawatra as his replacement. She is the third member of her family to serve as prime minister after her father, Thaksin Shinawatra (2001–06), and aunt, Yingluck Shinawatra (2011–14).

Unfortunately, these kinds of incidents have become normalised in Thailand. They demonstrate the extent to which conservative forces in the country continue to use various tools of “lawfare”, including the Constitutional Court, to target opposition politicians and parties and stifle the will of the people.

Despite these setbacks to Thailand’s democracy, the country is changing fast. It is becoming more progressive and less submissive to military and monarchy authority.

So, these latest manoeuvres by the country’s gerontocracy may not be a show of strength after all. Rather, as one Thai politics expert put it, these moves may be the “last gasp” of the conservative old guard that has long dominated Thai politics and society.

Revolving door of prime ministers

Over the last two decades, five prime ministers from the Pheu Thai party and its predecessors have been forced from office.

Thaksin Shinawatra was removed in a military coup in September 2006 and his party was later dissolved by the Constitutional Court.

Yingluck Shinatwatra led another successor party to a win at the 2011 elections, but she, too, was removed from power by the Constitutional Court in 2014, followed by another military coup.

With Paetongtarn Shinawatra’s elevation to prime minister last week, the powerful Shinawatra family has made a stunning return to the top of Thai politics. However, this may not be quite the triumphant re-establishment of a family political dynasty that Thaksin Shinawatra expects.

Paetongtarn Shinawatra is just 37 years old and inexperienced. And despite the fact the economy showed some growth in the first quarter of this year, her government faces significant economic challenges, such as high levels of household and corporate debt and an economic slowdown in the US and China.

Thaksin Shinawatra also remains in the cross-hairs of the conservative military establishment. After spending 15 years in self-imposed exile to avoid facing charges he contends were politically motivated, he returned to Thailand last year after Pheu Thai took power.

He was then indicted in June for allegedly insulting the monarchy during a media interview in 2015.

Another new progressive party dissolved

Perhaps the more concerning development in recent days, however, was the Constitutional Court’s decision to dissolve the progressive Move Forward party, which had won the most seats in parliament in last year’s election.

Progressive politicians have fallen afoul of the court a number of times in recent years.

In the 2019 elections, for example, Future Forward, a brand new progressive political party led by a young, charismatic politician, Thanathorn Juangroongruangkit, stunned observers by winning 80 seats. The court, however, soon disqualified Thanathorn from parliament and dissolved the party.

The party reconstituted itself as Move Forward under the leadership of another young leader, Pita Limjaroenrat, and it did even better in the 2023 elections, winning 151 seats in the House of Representatives.

The court, however, suspended Pita and dissolved his party over its attempts to reform the anti-democratic lese majeste law. It also banned the party’s leadership, including Pita, from politics for ten years.

The party’s remaining MPs will be able to stay in parliament under the banner of the People’s Party, though nearly 40 are now under investigation for alleged ethics violations, including its new leader, Natthaphong Ruengpanyawut.

What does this mean for Thai democracy?

There now appear to be three distinct centres of political power in Thailand:

  • Thaksin Shinawatra and the Pheu Thai party
  • the military-monarchy complex and their associated parties
  • the new progressive People’s Party.

While Pita warned against the continued use of “lawfare” to muzzle the opposition in an essay for The Economist earlier this month, there is some room for optimism.

It appears much of the population has moved on from the nepotism and rampant self-interest that has long defined Thai politics. According to a recent poll, nearly half of respondents said their preferred prime minister would be Pita (47%), while Paetongtarn was favoured by just 10.5% and Srettha just 8.7%.

The People’s Party is also offering a much more democratic vision for Thailand, based on integrity and reforming the lese majeste law. (Its leader, Natthaphong, has acknowledged, though, that the party must now “think carefully about how to amend it”.)

The party’s electoral march towards government looks difficult to stop. It’s likely Move Forward’s win in the 2023 election will turn into a landslide for the People’s Party at the next election.

The historical obedience and submission to the monarchy and military in Thai society is gradually being whittled away, as older, conservative voters are being replaced by those who want a more democratic and responsive government.

In recent years, there has also been some improvement in Thailand for personal freedoms — notably the legalisation of same-sex marriage and cannabis. The pressure to expand and consolidate basic political freedoms within a multi-party democracy will only increase.

Thailand is not an authoritarian regime – unlike its neighbours Myanmar and Laos – and at some point in the not-too-distant future, the rapidly changing Thai society may well force the military-monarchy complex to cede power for good.The Conversation

About the Author:

Adam Simpson, Senior Lecturer, International Studies, University of South Australia

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Economics & Fundamentals Opinions
22 Aug

The dovish FOMC minutes supported the growth of indices. The Australian index has been growing for 10 consecutive trading sessions

By JustMarkets

Stocks in the US ended the session higher on Wednesday. The Dow Jones Index (US30) rose by 0.14%, while the S&P 500 Index (US500) gained 0.42%. The NASDAQ Technology Index (US100) closed positive, 0.57% yesterday. Stocks rose on Wednesday after a significant downward revision to US payrolls data and a dovish FOMC meeting minutes from July 30-31 drove bond yields lower and reinforced the likelihood that the Fed will cut interest rates next month. The minutes from the July 30-31 FOMC meeting said that “a few” officials considered cutting interest rates at the July meeting, but the “overwhelming majority” of officials thought a rate cut in September was likely. Markets now await Fed Chairman Powell’s opening comments on Friday at the Fed’s annual symposium in Jackson Hole, Wyoming, for more clues about the Fed’s future policy path.

The US Bureau of Labor Statistics (BLS) revised the US employment numbers for the year to March downward by 818,000, stronger than expectations of 600,000 and the largest downward revision since 2009. The report was dovish for Fed policy, pointing to a weaker US labor market than initially reported.

Equity markets in Europe mostly went up yesterday. Germany’s DAX (DE40) rose by 0.50%, France’s CAC 40 (FR40) closed 0.52% higher, Spain’s IBEX 35 (ES35) gained 0.24%, and the UK’s FTSE 100 (UK100) closed up 0.12%.

WTI crude oil prices fell by 1.7% to $71.9 per barrel on Wednesday, settling at their lowest level since January, as investors reacted to the latest Federal Reserve meeting minutes and a significant downward revision to estimates of US job growth. Oil declined despite a drop in US crude inventories, which fell by 4.6 million barrels in the week ended August 16, exceeding analysts’ expectations. In addition, concerns over economic weakness in China could reduce the demand for crude oil and put further pressure on oil prices.

Asian markets traded yesterday without any unified dynamics. Japan’s Nikkei 225 (JP225) fell by 0.29%, China’s FTSE China A50 (CHA50) was down 0.17%, Hong Kong’s Hang Seng (HK50) lost -0.69% over yesterday, while Australia’s ASX 200 (AU200) was positive 0.16%.

The ASX 200 Index (AU200) gained 0.21%, extending its winning streak to a tenth session, as good Australian business activity data boosted market sentiment. Australia’s composite PMI rose to 51.4 in August from 49.9 in July. This is the fastest rise in three months, driven by a pickup in service sector activity despite a deeper contraction in manufacturing output.

Malaysia’s annual inflation rate for July 2024 stood at 2.0%, just below market expectations of 2.1%, and unchanged for the third consecutive month. The reading remained at its highest level since August 2023, with prices continuing to rise for food (1.6% vs. 2.0% in June), alcoholic beverages and tobacco (0.9% vs. 0.7%), and housing (3.2% vs. 3.2%). Core consumer prices, excluding volatile fresh food prices and administrative costs, rose 1.9% y/y in June, holding steady for a fourth month and remaining at the highest level since December 2023.

Au Jibun Bank’s Japan Manufacturing PMI rose to 49.5 in August 2024 from a four-month low of 49.1 in the previous month, compared with the market forecast of 49.8. Preliminary estimates showed a second consecutive month of contraction in factory activity. It also marked the sixth consecutive month of contraction in the manufacturing sector this year, driven by a further decline in new orders.

As expected, the Bank of Korea kept the benchmark rate unchanged at 3.5% for the 13th time at its August meeting. The decision came amid conflicting economic signals, with inflation falling but household debt rising and housing prices soaring after recent government measures. The council noted that short-term inflation expectations have fallen to the upper end of the 2% range. Meanwhile, this year, consumer inflation could reach the lower end of the 2% range, with an annualized rate of 2.5%.

S&P 500 (US500) 5,620.85 +23.73 (+0.42%)

Dow Jones (US30) 40,890.49 +55.52 (+0.14%)

DAX (DE40) 18,448.95 +91.43 (+0.50%)

FTSE 100 (UK100) 8,283.43 +10.11 (+0.12%)

USD index 101.16 −0.28 (−0.28%)

Important events today:
  • – Australia Manufacturing PMI (m/m) at 02:00 (GMT+3);
  • – Australia Services PMI (m/m) at 02:00 (GMT+3);
  • – Japan Manufacturing PMI (m/m) at 03:30 (GMT+3);
  • – Japan Services PMI (m/m) at 03:30 (GMT+3);
  • – German Manufacturing PMI (m/m) at 10:30 (GMT+3);
  • – German Services PMI (m/m) at 10:30 (GMT+3);
  • – Eurozone Manufacturing PMI (m/m) at 11:00 (GMT+3);
  • – Eurozone Services PMI (m/m) at 11:00 (GMT+3);
  • – UK Manufacturing PMI (m/m) at 11:30 (GMT+3);
  • – UK Services PMI (m/m) at 11:30 (GMT+3);
  • – Jackson Hole Symposium at 15:00 (GMT+3);
  • – US Initial Jobless Claims (w/w) at 15:30 (GMT+3);
  • – US Manufacturing PMI (m/m) at 16:45 (GMT+3);
  • – US Services PMI (m/m) at 16:45 (GMT+3);
  • – US Existing Home Sales (m/m) at 17:00 (GMT+3);
  • – US Natural Gas Storage (w/w) at 17:30 (GMT+3).

By JustMarkets

 

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

Economics & Fundamentals Financial News
21 Aug

Inflationary pressures are easing in Canada. Riksbank cut interest rate by 0.25%

By JustMarkets

On Tuesday, stocks in the US ended the session lower. The Dow Jones Index (US30) was down 0.15%, while the S&P 500 Index (US500) fell by 0.20%. The NASDAQ Technology Index (US100) closed negative 0.33%. Volatility increased ahead of the upcoming Jackson Hole Symposium and the release of minutes from the Fed’s last meeting, which could provide insight into the potential size of the expected September rate cut. Weakness in microchip stocks also weighed on the overall market. Energy producers also fell after crude oil prices fell to a one-week low.

Boeing (BA) fell 4.2% after its 777x test fleet was grounded due to structural cracks.

Canada’s annual inflation rate fell to 2.5% in July 2024 from 2.7% in the previous month, matching market expectations and marking the softest rise in consumer prices since March 2021. The result matched the Bank of Canada’s prognosis that inflation would fall to the 2.5% mark in the second half of the year, although inflation is still expected to jump due to the incoming base effect for gasoline prices. In addition, the closely watched median and truncated averages of key rates came in below expectations at 2.4% and 2.7%, respectively, reinforcing dovish expectations for the Bank of Canada.

Equity markets in Europe were mostly down yesterday. The German DAX (DE40) was down 0.35%, the French CAC 40 (FR40) closed down 0.22%, the Spanish IBEX 35 (ES35) was down 0.13%, and the British FTSE 100 (UK100) closed down 1.00%.

Eurozone construction output rose by 1.7% m/m in June, the largest increase in 17 months. Germany’s July Producer Price Index fell by 0.8% y/y, marking the thirteenth consecutive month of year-on-year price declines. The Bundesbank said in its monthly report that relatively strong wage growth in the Eurozone will likely keep core inflation “elevated.” That sets the stage for the euro to strengthen against the US dollar in the medium term. However, swaps discount the chances of a 25bp ECB rate cut at the September 12 meeting to 100%.

Sweden’s Riksbank cut its key rate by 25 bps to 3.5% at its August 2024 meeting, in line with market consensus, and signaled that two or three more rate cuts would be needed this year if inflation evolves in line with the Central Bank’s estimates. It was the second rate cut in this cycle. The Riksbank noted that inflation has continued to fall in recent months, with core rates converging quickly to the 2% target, giving the Central Bank more confidence that the disinflation projected in the June policy report correctly gauges the economic backdrop. In addition, policymakers noted that the growth outlook for Sweden’s economy may be weaker than expected earlier this year.

Turkey’s Central Bank left the benchmark weekly repo auction rate unchanged at 50% at its August 2024 meeting, as expected by markets. The Monetary Policy Committee noted that core inflation in the Turkish economy rose slightly as expected but remained below the second-quarter average amid signs that the restrictive monetary backdrop has led to a slowdown in domestic demand.

WTI crude oil prices settled near $74 a barrel on Tuesday after dropping 2.5% in the previous session amid hopes of a ceasefire in the Middle East. The US Secretary of State Antony Blinken confirmed that Israeli Prime Minister Benjamin Netanyahu has accepted an offer to resolve differences preventing a ceasefire agreement in Gaza, but tensions remain high.

Asian markets traded flat yesterday. Japan’s Nikkei 225 (JP225) rose by 1.80%, China’s FTSE China A50 (CHA50) was down 0.45%, Hong Kong’s Hang Seng (HK50) was down 0.33%, while Australia’s ASX 200 (AU200) was positive 0.22%.

S&P 500 (US500) 5,597.12 −11.13 (−0.20%)

Dow Jones (US30) 40,834.97 −61.56 (−0.15%)

DAX (DE40) 18,357.52 −64.17 (−0.35%)

FTSE 100 (UK100) 8,273.32 −83.62 (−1.00%)

USD Index 101.37 −0.52 (−0.51%)

Important events today:
  • – Japan Trade Balance (m/m) at 09:00 (GMT+3);
  • – US Crude Oil Reserves (w/w) at 17:30 (GMT+3);
  • – US FOMC Meeting Minutes at 21:00 (GMT+3).

By JustMarkets

 

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

Economics & Fundamentals Financial News
20 Aug

PBoC expectedly left rates unchanged. Bitcoin returned to the $60,000 mark

By JustMarkets

At Monday’s close, the Dow Jones (US30) Index was up 0.58%, while the S&P 500 (US500) Index increased by 0.97%. The NASDAQ Technology Index (US100) closed positive 1.39%. That day, dovish Fed comments drove bond yields lower and supported equities. San Francisco Fed President Daly said that recent US economic data has given the Fed “more confidence” that inflation is under control and it is time to consider adjusting the underlying cost of borrowing. In addition, Minneapolis FRB President Kashkari signaled that he would be open to a Fed rate cut at the September FOMC meeting. Positive corporate news also supported stocks on Monday, with Advanced Micro Devices (AMD) rising more than 4% and leading chip maker stocks higher after acquiring server maker ZT Systems in a deal valued at $4.9 billion.

The US leading indicators for July fell by 0.6% m/m, weaker than expectations of 0.4% m/m.

Markets rate the odds of a 25bp rate cut at the September 17–18 FOMC meeting at 100% and a 50bp rate cut at 24%. Investor optimism is high as they anticipate a possible interest rate cut by the Federal Reserve, with Fed Chairman Jerome Powell’s speech at the upcoming symposium in Jackson Hole taking center stage.

Canada will release its inflation report today. Inflation is expected to remain at 2.9% y/y, and core inflation (excluding food and energy prices) is expected to remain at 1.9% y/y. However, it is important to remember that the Bank of Canada (BoC) also targets median rates. According to the median estimate, inflationary pressures are expected to ease slightly from 2.6% y/y to 2.5% y/y. Overall, lower inflation will increase the likelihood of further rate cuts by the Bank of Canada, which will hurt the Canadian dollar. If the data shows a surprise in the form of rising inflation, it will increase the likelihood that the BoC will not be in a hurry to cut rates further and will support the Canadian dollar.

Bitcoin rose above the $60,000 mark on Tuesday, hitting a one-week-high amid improving risk sentiment and a steady increase in global liquidity. Traders also argued that cryptocurrencies could now resume their rally on the back of seasonality.

Equity markets in Europe mostly went up yesterday. Germany’s DAX (DE40) rose by 0.54%, France’s CAC 40 (FR40) closed higher by 0.70%, Spain’s IBEX 35 (ES35) added 1.40%, and the UK’s FTSE 100 (UK100) closed up 0.55%. In Europe today, investors will be evaluating German producer inflation data and the latest decision by Sweden’s Central Bank.

On Monday, WTI crude oil prices fell more than 2.5% below $75 per barrel, extending a 1.9% decline from the previous session amid ongoing Gaza ceasefire talks and concerns about weakening demand, especially from China. US Secretary of State Antony Blinken is in Israel emphasizing the urgency of achieving a ceasefire and hostage release, with further talks scheduled in Cairo this week. This desire for peace could ease geopolitical tensions and lower the risk premium for oil. In addition, China’s recent economic data has been disappointing, with slowing growth, falling house prices, and rising unemployment. This has forced Chinese refineries to cut back on crude oil processing, further reducing demand.

The US natural gas (XNG/USD) prices rose by 5% to over $2.20/MMBtu, nearing a one-month high amid tightening supply and demand. Estimates predict a heat wave across much of the western, central, and southern US this week, which is expected to increase cooling demand and boost natural gas consumption.

Asian markets were mostly up yesterday. Japan’s Nikkei 225 (JP225) was down 1.77%, China’s FTSE China A50 (CHA50) added 0.51%, Hong Kong’s Hang Seng (HK50) was up 0.80%, and Australia’s ASX 200 (AU200) was positive 0.12%.

Minutes of the Reserve Bank of Australia’s August meeting showed that board officials discussed further tightening but decided that keeping the current rate would better balance risks. The Central Bank also indicated that the money rate might need to remain stable for an extended period, saying the risks that inflation will not return to the 2–3% target within a reasonable time frame have increased. Governor Michele Bullock recently said the Central Bank still has a long way to go in easing monetary policy as core inflation remains too high.

The People’s Bank of China (PBoC) kept key lending rates at record lows, which was in line with market expectations. The one-year prime rate (LPR), the benchmark for most corporate and household loans, remained unchanged at 3.45%, while the five-year rate, the key benchmark for mortgages, remained at 3.85%. The decision underscores the Central Bank’s commitment to avoiding “radical” economic measures.

S&P 500 (US500) 5,608.25 +54.00 (+0.97%)

Dow Jones (US30) 40,896.53 +236.77 (+0.58%)

DAX (DE40) 18,421.69 +99.29 (+0.54%)

FTSE 100 (UK100) 8,356.94 +45.53 (+0.55%)

USD index 101.87 −0.59 (−0.58%)

Important events today:
  • – New Zealand Trade Balance (q/q) at 01:45 (GMT+3);
  • – China PBoC Loan Prime Rate at 03:15 (GMT+3);
  • – Australia Monetary Policy Meeting Minutes (m/m) at 04:30 (GMT+3);
  • – Switzerland Trade Balance (m/m) at 09:00 (GMT+3);
  • – Eurozone Consumer Price Index (m/m) at 12:00 (GMT+3);
  • – Switzerland SNB Chairman Jordan Speaks at 12:30 (GMT+3);
  • – Canada Consumer Price Index (m/m) at 15:30 (GMT+3);
  • – US FOMC Member Bostic Speaks at 20:35 (GMT+3);
  • – US FOMC Member Barr Speaks at 21:45 (GMT+3).

By JustMarkets

 

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

Economics & Fundamentals Financial News
19 Aug

Oil prices are declining due to weakening demand from China. US and European stock indices continue to rise in price

By JustMarkets

On Friday, the Dow Jones (US30) Index gained 0.24% (+2.79% for the week), while the S&P 500 (US500) Index gained 0.20% (+3.78% for the week). The NASDAQ Technology Index (US100) closed positive 0.21% (for the week +4.99%). A busy week of economic data helped the market recover from earlier losses in August. Lower inflation, strong retail sales, and fewer jobless claims helped calm fears of a possible recession. In addition, investor sentiment was boosted by Federal Reserve officials signaling a possible rate cut in September, which supported the week’s momentum.

The US presidential race is heating up as Democrats seek to boost Vice Presidential nominee Kamala Harris during the party’s convention in Chicago, which begins on Monday. During the four-day event, prominent Democratic figures are expected to deliver speeches to bolster Harris’s support. Harris has energized the Democratic base and narrowed the gap with Republican nominee Donald Trump in some opinion polls. As the election race tightens, investors seek clarity on Harris’ policy positions. In particular, Harris has emphasized her commitment to maintaining the independence of the Federal Reserve, which is in stark contrast to Trump’s stance.

Equity markets in Europe mostly rose on Friday. Germany’s DAX (DE40) rose by 0.77% (for the week +3.03%), France’s CAC 40 (FR40) closed up 0.35% (for the week +2.09%), Spain’s IBEX 35 (ES35) added 0.59% (for the week +2.52%), and the UK’s FTSE 100 (UK100) closed down 0.43% (for the week +1.75%).

WTI crude futures fell 1.9% to settle at $76.65 per barrel on Friday following reports that Qatar urged Iran to ease tensions with Israel during ceasefire talks in the Gaza Strip. The drop in oil prices also reflects broader concerns about weakening demand from China, the world’s top oil importer. Recent data on China’s economy show slowing growth, falling housing prices, and rising unemployment, which has prompted Chinese refineries to cut back on oil processing. In addition, the Organization of the Petroleum Exporting Countries (OPEC) and the International Energy Agency (IEA) lowered their estimates for oil demand growth due to China’s weakening economy.

Asian markets were mostly up last week. Japan’s Nikkei 225 (JP225) rose by 7.91%, China’s FTSE China A50 (CHA50) added 1.15%, Hong Kong’s Hang Seng (HK50) gained 1.91% over 5 trading days, and Australia’s ASX 200 (AU200) posted a positive 2.49%.

The Nikkei 225 Index (JP225) fell by 1.77%, and the broader Topix Index lost 1.4% on Monday, ending a five-day run of gains amid profit-taking and a rising yen-pressured domestic equities. A stronger yen hurts the profitability outlook for Japan’s export-oriented industries and discourages investors from borrowing the currency to invest in higher-yielding assets. Markets now await Japanese inflation data on Friday to clarify the Bank of Japan’s (BoJ) monetary policy path.

Thailand’s economy grew by 0.8% in the second quarter of 2024, compared with market estimates of 0.9% after a marginally revised 1.1% growth in the first quarter. The slowdown came amid heightened political uncertainty due to several major court cases in the constitutional court. Private consumption growth slowed sharply (0.3% vs. 1.1% in the first quarter) amid uncertainty over the fate of the $14 billion stimulus plan.

S&P 500 (US500) 5,554.25 +11.03 (+0.20%)

Dow Jones (US30) 40,659.76 +96.70 (+0.24%)

DAX (DE40) 18,322.40 +139.16 (+0.77%)

FTSE 100 (UK100) 8,311.41 −35.94 (−0.43%)

USD Index 102.40 −0.06 (−0.06%)

There are no important events today.

 

by JustMarkets, 2024.08.19

We advise you to get acquainted with the daily forecasts for the major currency pairs.
By JustMarkets

 

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

Economics & Fundamentals Financial News
← Previous Page
Next Page →