InvestMacro

By JustForex

The Dow Jones Index (US30) decreased by 0.43% at the close of the stock market yesterday, while the S&P 500 (US500) fell by 0.23%. NASDAQ Technology Index (US100) added 0.69% by the end of the day. The decline is getting deeper on Wall Street despite rising consumer confidence in September. The S&P 500 fell yesterday to its lowest level since December 2020, bringing this month’s loss nearly 8%. Ned Davis Research now thinks there is a 98% chance of an impending global recession.

At his speech yesterday, Fed spokesman Bullard said that the US has a serious problem with inflation, calling for further rate hikes. The committee will continue to raise rates, with a target peak of 4.5%. Bullard also added that the Fed would need to keep rates high for some time. Federal Reserve Bank of Minneapolis President Neel Kashkari said that the current pace of rate hikes is “appropriate” and reiterated the Fed’s commitment to lower inflation.

Stock markets in Europe were mostly down yesterday. Germany’s DAX (DE30) decreased by 0.72%, France’s CAC 40 (FR40) fell by 0.27%, Spain’s IBEX 35 (ES35) lost 0.84%, Britain’s FTSE 100 (UK100) closed down by 0.52%.

Based on a model of the European energy market and economy, Bloomberg Economics offers a baseline scenario of Eurozone GDP falling 1%, with the decline starting in Q4. If the coming months turn out to be particularly cold and countries fail to allocate scarce fuel supplies efficiently, the decline could be as much as 5%. Another study (BloombergNEF) shows that Europe is ready for a winter without Russian gas. Europe’s rush to buy LNG means that Europe will likely have enough fuel for power generation this winter to offset supplies from Russia. The region could import nearly 40% more LNG this coming winter than last year, and next summer, it could increase purchases by about 14% to recover lost supplies.

According to analysts, the most important signal to calm the markets now may come from the United Kingdom. The Bank of England may raise the rate sharply by 125-150 bps at an emergency meeting. However, the problem with a sharp increase by the Bank of England is that markets may perceive such action as a sign of desperation and aggravation of Britain’s perceived financial problems. Given that the government’s energy and budget plans have caused the market to collapse further, the authorities must back up any action by the Bank of England with a fiscal response. This could mean a partial reversal of the measures the new Liz Truss-led government has just put at the center of its economic reform strategy.

The Baltic Pipe gas pipeline, which connects Polish territory with the Norwegian offshore via Denmark, was launched at a ceremony in Poland. At the same time, both strings of the Nord Stream pipeline experienced a drastic drop in pressure. The German government is not ruling out that the pressure drop could have been caused by deliberate sabotage aimed at creating uncertainty in the European gas markets. The Danish prime minister said sabotage could not be ruled out. “We are talking about three leaks with some distance between them, so it is difficult to imagine that it is a coincidence.” None of the pipelines were delivering gas to Europe when the leaks were discovered, but the incidents would dash any remaining hopes that Europe could get gas through Nord Stream 1 before winter arrives. Gas prices in Europe jumped by 9% percent after the news.

Oil prices rose slightly yesterday as investors raised their bets on oil supply disruptions as Hurricane Ian is expected to hit Florida on Wednesday.

Chinese authorities will continue to actively buy goods from other countries, including oil and gas from Russia, China’s deputy commerce minister said.

Asian markets traded higher yesterday. Japan’s Nikkei 225 (JP225) gained 0.53%, Hong Kong’s Hang Seng (HK50) gained 0.03% for the day, and Australia’s S&P/ASX 200 (AU200) was up by 0.41% on Tuesday.

Independent research shows that deflation risks in China are rising amid the real estate crisis. Companies are reporting the weakest price growth since late 2020. Winter lockdowns may intensify deflation fears. The World Bank worsened China’s GDP growth forecast for 2022 and 2023 due to the real estate crisis and the country’s authorities’ tough policies to curb the spread of COVID-19. According to the new forecast, China’s GDP will increase by 2.8% in 2022 and by 4.5% next year.

S&P 500 (F) (US500) 3,647.29  −7.75 (−0.21%)

Dow Jones (US30) 29,134.99 −125.82 (−0.43%)

DAX (DE40) 12,139.68 −88.24 (−0.72%)

FTSE 100 (UK100) 6,984.59 −36.36 (−0.52%)

USD Index 114.11 +0.01 (0.00%)

• – Japan Monetary Policy Meeting Minutes (m/m) at 02:50 (GMT+3);
• – Australia Retail Sales (m/m) at 04:30 (GMT+3);
• – Eurozone ECB President Lagarde Speaks at 10:15 (GMT+3);
• – US Pending Home Sales (m/m) at 17:00 (GMT+3);
• – US FOMC Member Bullard Speaks at 17:10 (GMT+3);
• – US Fed Chair Powell Speaks at 17:15 (GMT+3);
• – US Crude Oil Reserves (w/w) at 17:30 (GMT+3);
• – US FOMC Member Bowman Speaks at 18:00 (GMT+3).

By JustForex

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.

By Jason Dunion, University of Miami

As Hurricane Ian intensifies on its way toward the Florida coast, hurricane hunters are in the sky doing something almost unimaginable: flying through the center of the storm. With each pass, the scientists aboard these planes take measurements that satellites can’t and send them to forecasters at the National Hurricane Center.

Jason Dunion, a University of Miami meteorologist, leads the National Oceanic and Atmospheric Administration’s 2022 hurricane field program. He described the technology the team is using to gauge hurricane behavior in real time and the experience aboard a P-3 Orion as it plunges through the eyewall of a hurricane.

Flying into Hurricane Harvey aboard a a P-3 Hurricane Hunter nicknamed Kermit in 2018.
Lt. Kevin Doreumus/NOAA

What happens aboard a hurricane hunter when you fly into a storm?

Basically, we’re take a flying laboratory into the heart of the hurricane, all the way up to Category 5s. While we’re flying, we’re crunching data and sending it to forecasters and climate modelers.

In the P-3s, we routinely cut through the middle of the storm, right into the eye. Picture an X pattern – we keep cutting through the storm multiple times during a mission. These might be developing storms, or they might be Category 5s.

We’re typically flying at an altitude of around 10,000 feet, about a quarter of the way between the ocean surface and the top of the storm. We want to cut through the roughest part of the storm because we’re trying to measure the strongest winds for the Hurricane Center.

That has to be intense. Can you describe what scientists are experiencing on these flights?

My most intense flight was Dorian in 2019. The storm was near the Bahamas and rapidly intensifying to a very strong Category 5 storm, with winds around 185 mph. It felt like being a feather in the wind.

When we were coming through the eyewall of Dorian, it was all seat belts. You can lose a few hundred feet in a couple of seconds if you have a down draft, or you can hit an updraft and gain a few hundred feet in a matter of seconds. It’s a lot like a rollercoaster ride, only you don’t know exactly when the next up or down is coming.

At one point, we had G-forces of 3 to 4 Gs. That’s what astronauts experience during a rocket launch. We can also get zero G for a few seconds, and anything that’s not strapped down will float off.

Even in the rough parts of the storm, scientists like myself are busy on computers working up the data. A technician in the back may have launched a dropsonde from the belly of the plane, and we’re checking the quality of the data and sending it off to modeling centers and the National Hurricane Center.

What are you learning about hurricanes from these flights?

One of our goals is to better understand why storms rapidly intensify.

Rapid intensification is when a storm increases in speed by 35 mph in just a day. That equates to going from Category 1 to a major Category 3 storm in a short period of time. Ida (2021), Dorian (2019) and Michael (2018) are just a few recent hurricanes that rapidly intensified. When that happens near land, it can catch people unprepared, and that gets dangerous fast.

Since rapid intensification can happen in a really short time span, we have to be out there with the hurricane hunters taking measurements while the storm is coming together.

So far, rapid intensification is hard to predict. We might start to see the ingredients quickly coming together: Is the ocean warm to a great depth? Is the atmosphere nice and juicy, with a lot of moisture around the storm? Are the winds favorable? We also look at the inner core: What does the structure of the storm look like, and is it starting to consolidate?

Satellites can offer forecasters a basic view, but we need to get our hurricane hunters into the storm itself to really pick the hurricane apart.

What does a storm look like when it’s rapidly intensifying?

Hurricanes like to stand up straight – think of a spinning top. So, one thing we look for is alignment.

A storm that isn’t yet fully together might have low-level circulation, a few kilometers above the ocean, that isn’t lined up with its mid-level circulation 6 or 7 kilometers up. That isn’t a very healthy storm. But a few hours later, we might fly back into the storm and notice that the two centers are more lined up. That’s a sign that it could rapidly intensify.

We also look at the boundary layer, the area just above the ocean. Hurricanes breathe: They draw air in at low levels, the air rushes up at the eyewall, and then it vents out at the top of the storm and away from the center. That’s why we get those huge updrafts in the eyewall.

So we might watch our dropsonde or tail doppler radar data for how the winds are flowing at the boundary layer. Is that really moist air rushing in toward the center of the storm? If the boundary layer is deep, the storm can also take a bigger inhale.

We also look at the structure. A lot of times the storm looks healthy on satellite, but we’ll get in with the radar and the structure is sloppy or the eye may be filled with clouds, which tells us the storm isn’t quite ready to rapidly intensify. But, during that flight, we might start to see the structure change pretty quickly.

Air in, up and out – the breathing – is a great way to diagnose a storm. If that breathing looks healthy, it can be a good sign of an intensifying storm.

What instruments do you use to measure and forecast hurricane behavior?

We need instruments that not only measure the atmosphere but also the ocean. The winds can steer a storm or tear it apart, but the ocean heat and moisture are its fuel.

We use dropsondes to measure temperature, humidity, pressure and wind speed, and send back data every 15 feet or so all the way to the ocean surface. All of that data goes to the National Hurricane Center and to modeling centers so they can get a better representation of the atmosphere.

One P-3 has a laser – a CRL, or compact rotational raman LiDAR – that can measure temperature, humidity and aerosols from the aircraft all the way down to the ocean surface. It can give us a sense of how juicy the atmosphere is, so how conducive it is for feeding a storm. The CRL operates continuously over the entire flight track, so you get this beautiful curtain below the aircraft showing the temperature and humidity.

The planes also have tail doppler radars, which measure how moisture droplets in the air are blowing to determine how the wind is behaving. That gives us a 3D look at the wind field, like an X-ray of the storm. You can’t get that from a satellite.

We also launch ocean probes call AXBTs – aircraft expendable bathythermograph – out ahead of the storm. These probes measure the water temperature down several hundred feet. Typically, a surface temperature of 26.5 degrees Celsius (80 Fahrenheit) and above is favorable for a hurricane, but the depth of that heat is also important.

If you have warm ocean water that’s maybe 85 F at the surface, but just 50 feet down the water is quite a bit colder, the hurricane is going to mix in that cold water pretty quickly and weaken the storm. But deep warm water, like we find in eddies in the Gulf of Mexico, provides extra energy that can fuel a storm.

This year, we’re also testing a new technology – small drones that we can launch out of the belly of a P-3. They have about a 7- to 9-foot wingspan and are basically a weather station with wings.

One of these drones dropped in the eye could measuring pressure changes, which indicate whether a storm is getting stronger. If we could drop a drone in the eyewall and have it orbit there, it could measure where the strongest winds are – that’s another important detail for forecasters. We also don’t have a lot of measurements in the boundary layer because it’s not a safe place for a plane to fly.

You also targeted the Cabo Verde islands off Africa for the first time this year. What are you looking for there?

The Cabo Verde Islands are in the Atlantic’s hurricane nursery. The seedlings of hurricanes come off Africa, and we’re trying to determine the tipping points for theses disturbances to form into storms.

Over half the named storms we get in the Atlantic come from this nursery, including about 80% of the major hurricanes, so it’s important, even though the disturbances are maybe seven to 10 days ahead of a hurricane forming.

In Africa, a lot of thunderstorms develop along the Sahara desert’s southern border with the cooler, moister Sahel region in the summer. The temperature difference can cause ripples to develop in the atmosphere that we call tropical waves. Some of those tropical waves are the precursors for hurricanes. However, the Saharan air layer – huge dust storms that come rolling off Africa every three to five days or so – can suppress a hurricane. These storms peak from June to mid-August. After that, tropical disturbances have a better chance of reaching the Caribbean.

At some point not too far in the future, the National Hurricane Center will have to do a seven-day forecast, rather than just five days. We’re figuring out how to improve that early forecasting.

About the Author:

Jason Dunion, Research Meteorologist, University of Miami

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

By JustForex

At yesterday’s stock market close, the Dow Jones index (US30) decreased by 1.11%, and the S&P 500 index (US500) fell by 1.03%. The NASDAQ Technology Index (US100) lost 0.63% on Monday. The Fed’s aggressive tightening campaign has pushed the US dollar to new multi-year highs, and many are worried about the consequences of such a strong dollar. Fed officials’ statements continue to be hawkish, with Boston Fed President Susan Collins saying Monday that additional tightening is needed. The US 2-year bond yields have reached 4.34%. In addition, a strong dollar could lead companies to release weak forecasts for the coming quarters, which could further exacerbate the drop in stock indices.

According to strategists at Morgan Stanley, a sharp rise in the dollar usually ends in a crisis. MS experts believe that a possible minimum for the benchmark S&P 500 index will come late this year or early next year at 3,000-3,400 points. That means an 8-13% decline from current prices.

Equity markets in Europe were mostly down yesterday. Germany’s DAX (DE30) decreased by 0.46%, France’s CAC 40 (FR40) fell by 0.24%, Spain’s IBEX 35 (ES35) lost 0.99%, Britain’s FTSE 100 (UK100) closed up to 0.03%.

Germany’s economy is heading for recession, the IFO Institute said Monday, reporting a stronger-than-forecast drop in business activity across all sectors. The business climate index fell to 84.3 from 88.6 in August. The decline was noticeable in all sectors of the German economy. The report said the energy price shock is dragging consumers’ purchasing power down and making production unprofitable for many companies. Germany is struggling to avoid gas shortages this winter.

ECB head Christine Lagarde said yesterday that the Governing Council intends to continue raising interest rates at its next meetings, even though the economic outlook is worsening.

Giorgia Meloni won a clear majority in Sunday’s elections in Italy, making her the country’s first female prime minister at the head of the most right-wing government since World War II. The center-right won 44.34% of the vote in the elections to the Chamber of Deputies.

EU countries plan to delay a cap on Russian oil prices because of the controversy.

Russia’s actions in Ukraine will cost the world economy $2.8 trillion in lost production by the end of next year – and even more if a harsh winter leads to rationing of energy consumption in Europe, the Organization for Economic Cooperation and Development (OECD) said Monday. Global financial companies, still reeling from multibillion-dollar losses due to their business withdrawal from Russia, are now reviewing the risks of doing business in China after escalating tensions over Taiwan.

Turkey and Kazakhstan do not recognize the results of the referendums in the DNR, LNR, Kherson, and Zaporizhzhia regions.

Oil prices hit a nine-month low on Monday amid choppy trade under pressure from a strengthening dollar and expectations of new sanctions against Russia. It also became known yesterday that more than 1 million barrels of oil from the US are scheduled to be delivered to Europe daily. Supplies from the US should come to replace oil from Russia.

Asian markets were trading lower yesterday. Japan’s Nikkei 225 (JP225) decreased by 2.66%, Hong Kong’s Hang Seng (HK50) ended the day down by 0.44%, and Australia’s S&P/ASX 200 (AU200) ended Monday down by 1.60%.

The Chinese economy will recover moderately in 2023 after sluggish growth in 2022. In June, the OECD projected the economy to grow 4.4% in 2022 but now expects growth to be only 3.2%. By 2023, growth is projected at 4.7%.

S&P 500 (F) (US500) 3,655.04 −38.19  (−1.03%)

Dow Jones (US30) 29,260.81 −329.60 (−1.11%)

DAX (DE40) 12,227.92  −56.27 (−0.46%)

FTSE 100 (UK100) 7,020.95 +2.35 (+0.033%)

USD Index 114.13 +0.93 (+0.82%)

• – US Fed Chair Powell Speaks at 14:30 (GMT+3);
• – Eurozone ECB President Lagarde Speaks at 14:30 (GMT+3);
• – US Core Durable Goods Orders (m/m) at 15:30 (GMT+3);
• – US FOMC Member Bullard Speaks at 16:55 (GMT+3);
• – US CB Consumer Confidence (m/m) at 17:00 (GMT+3);
• – US New Home Sales (m/m) at 17:00 (GMT+3).

By JustForex

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.

By ForexTime

Article by ForexTime

ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com