“‘Sharp’ global labour market slowdown underway: UN… The war raging in Ukraine and other overlapping crises are taking a toll on labour markets worldwide, the UN said Monday, suggesting a “sharp” slowdown was already underway.
“In a fresh report, the International Labour Organization cautioned that the outlook for global labour markets has deteriorated in recent months…
“Amid deepening energy and food security crises, swelling inflation, tightening monetary policy and fears of a looming global recession, it said both employment creation and the quality of jobs were declining.
“While it normally takes time for an economic slowdown or a recession to result in job destruction and unemployment, available data suggests that a sharp labour market slowdown is already underway,” the report said.”
https://uk.finance.yahoo.com/news/sharp-global-labour-market-slowdown-110343827.html
“The world is teetering on the verge of a full-blown energy crisis as crude oil prices threaten to cross $100 a barrel, once again, coal prices surge to record highs, and natural gas cost rises to an unprecedented level that is equivalent to $250 a barrel for oil.
“The World Energy Outlook 2022, released by the International Energy Agency last week, paints a very bleak scenario.”
“Think the Energy Crisis Is Bad? Wait Until Next Winter…
“It is winter 2023-2024 that is going to be the real crisis. Any current energy planning that fails to account for next year and beyond is jumping out of the frying pan and into the fire—where this winter is a problem, 2023’s may be a catastrophe.”
https://time.com/6226587/energy-crisis-next-winter/
“Oil CEOs warn this winter’s energy crisis will be nothing compared to the next.
“Eni chief Claudio Descalzi explained, “the issue is not this winter. It will be the next one, because we are not going to have Russian gas – 98% [less] next year, maybe nothing.” Protests have already begun This could lead to serious social unrest — already, small to medium-sized protests have cropped up around Europe.”
“The [US] diesel market is in a perfect storm as prices surge, supply dwindles ahead of winter…
“A perfect storm is taking place in the diesel market, with dwindling diesel reserves, a drought on the Mississippi River pushing more product to rail and truck, and a possible rail strike leading to a surge in prices that is expected to continue. Diesel prices have increased by 33% for November deliveries.”
“Biden accuses oil companies of ‘war profiteering’ and threatens windfall tax…
“In remarks on Monday, just over a week away from the 8 November midterm elections, Biden criticised major oil companies for making record profits while refusing to help lower prices at the pump for American people. The president said he would look to Congress to levy tax penalties on oil companies…”
“The Fed may have to blow up the economy to get inflation under control.
“...this is uncharted territory for the Fed. Former central bank chairs Alan Greenspan, Ben Bernanke and current Treasury Secretary Janet Yellen never had to raise rates this many times in a row by such large amounts. It’s unclear what all this tightening will do to the economy.”
https://edition.cnn.com/2022/10/30/investing/stocks-week-ahead/index.html
“‘Perfect storm’ swirls as Canadians face hot inflation, rising rates.
“Canadian consumers and small businesses are being squeezed from both sides, prompting politicians, unions and even some economists to implore the central bank to slow its pace of tightening. The bank this week signaled its tightening campaign was nearing its peak, but made clear it was not done yet…”
“Rishi Sunak is preparing years of tax rises for Britain in an effort to make up for a £50bn fiscal hole left by Liz Truss’s disastrous tenure in Downing Street, according to a Treasury insider.
“After a meeting between the prime minister and Jeremy Hunt on Monday to plan the upcoming autumn statement, a Treasury source said things were going to get “rough”.”
“As the dust settles on one crisis, fears are growing that the UK pensions industry is in danger of unwittingly lurching into another.
“Economic Armageddon was on the horizon just weeks ago… Liability-driven investments (LDIs) have been widely blamed for the crisis. Experts now fear that their “demonisation” could have disastrous consequences… Trading out of LDIs risks stranding hundreds of UK final salary pension schemes that are in deficit, they say.”
https://www.telegraph.co.uk/business/2022/10/30/next-crisis-looming-britains-pensions-industry/
“More than a third of UK hospitality firms ‘could go bust by next year’…
“With nearly all businesses saying they face higher energy costs and food price inflation, 35% of respondents to a quarterly hospitality industry survey said they expected to be operating at a loss or to be unable to continue trading by the end of the year.”
“The latest inflation data out of Europe isn’t pretty.
“Consumer prices in the eurozone rose by a record 10.7% in October, up from 9.9% last month, according to the EU’s statistics agency, Eurostat.
“The figures surprised economists at Bank of America, who had expected inflation to cool slightly to 9.8%.”
https://finance.yahoo.com/news/europe-energy-crisis-just-getting-170609780.html
“Europe’s Firms Seek Most Emergency Funds Since Pandemic Peak…
“Firms grappling with high inflation and soaring operating costs are seeking fresh short-term liquidity lines in an echo of the worst days of the 2020 coronavirus pandemic… The increase in emergency funding is a worrying sign as central banks fight to tame surging inflation.”
“Bank Outlook 2023: Running out of energy.
“European bank fundamentals are being pressured by the ongoing energy crisis. Risks from direct exposure to the energy sector are heading higher. Additionally, energy-intensive sectors stand to suffer from higher energy prices.”
https://think.ing.com/articles/bank-outlook-2023-running-out-of-energy/
“German industrial workers fire warning shot with strikes over pay.
“Thousands of German industrial workers walked out for several hours over the weekend in an escalating pay dispute as leaders of Germany’s powerful IG Metall union warned of more strikes to come if employers failed to improve their offer.”
https://www.ft.com/content/7f05466b-209c-4f30-8b47-12a0955923f1
“Hungary loses buildings, services amid fuel crisis.
“People in Hungary are grappling with the closure of many public buildings and services… dozens of Hungarian cities have not been able to afford the high cost of heating facilities, such as libraries, museums, pools, spas, theaters, and sports venues, after government subsidies ended.”
https://www.chinadaily.com.cn/a/202211/01/WS6360764da310fd2b29e7f9b4.html
“The Italian wine sector has warned of glass shortages this autumn, which could amount to between 150,000 and 200,000 tonnes…
“Among the factors that are at root of the problem are high energy prices, supply chain delays, rising raw material prices, and the logistics crisis, according to Federvini. For example, soda ash, essential in glass production, was imported from the Donbass, a region at the centre of the war between Russia and Ukraine.”
https://www.esmmagazine.com/packaging-design/italian-wine-sector-warns-of-glass-shortages-223665
“Japan cannot survive without Russian oil, warns trading house chief…
“Japan’s near total dependence on imported energy means it cannot “survive” without continuing to buy oil and gas from Russia, said the head of one of the country’s big five trading houses… “Unlike Europe or the US, Japan depends on overseas for almost all of its energy needs so it’s not possible to cut off ties with Russia because of the sanctions,” Okafuji said…”
https://www.ft.com/content/fd2c7271-60a5-49f2-8168-cf24a923e936
“Bank of Japan’s inevitable pivot looms as a risk for markets…
“The longer Japan sticks with Yield Curve Control in the current global context, the more the authorities will have to spend to resist a depreciation, and the greater the structural damage to the core of the country’s financial system. No wonder most observers expect Japan to have to exit this policy…”
https://www.ft.com/content/7dc54c2c-898e-4c96-b312-dad57e250a61
“Asia’s factories slumped in October as global demand for merchandise goods made in the region continues to weaken.
“The slowdown in Asia adds to growing evidence that a pronounced deceleration in world trade is underway as soaring inflation and interest rates crimp consumer spending in the US and Europe.”
“China’s factory, construction, service activity slump in fresh sign of economic weakness.
“China’s official gauges measuring factory, construction and service activities all tumbled into contraction territory in October, signaling fresh signs of weakness in the world’s second-largest economy.”
“Zinc Plunges as Factory Data Fuels Concerns Over Steel Demand.
“Zinc led a decline in industrial metals after a slump in China’s economic activity added to signs of weakening demand in the world’s No. 2 economy, while a rebound in the dollar made commodities priced in the currency more expensive.”
“China’s property slump continues as October prices fall.
“China’s property sector, once a pillar of growth, has slowed sharply in the past year as a result of a government clampdown on excessive borrowing by developers, and a COVID-19-induced economic slump. Prices in 100 cities dropped for the fourth straight month in October…”
“China Builder CIFI’s Shares Plunge After Debt-Payment Suspension.
“CIFI Holdings Group Co. shares plunged to fresh record lows after saying it will suspend offshore financing payments and explore a holistic debt solution after being largely unable to raise new funds overseas this year… Last month’s missed payment was particularly worrying because CIFI was considered a barometer for the broader success of a new rescue effort by Beijing to use state guarantees to help a select group of builders access domestic funding.”
“Chinese Developer Greenland Says It’s Likely to Default on Bond…
“The Shanghai-based developer, which is partially owned by local government entities and had long been considered among the nation’s most resilient, said in a filing that the issuer and guarantor wouldn’t be able to repay the $362 million outstanding on the note, which matures Nov. 13.”
“Hong Kong’s Q3 GDP shrinks 4.5% y/y for third straight quarter of contraction…
“The outcome was worse than a range of 0.6% to 0.9% growth projected by HSBC, Morgan Stanley and Natixis, and a 0.3% contraction forecast by Barclays. The city’s economy shrank by 4.0% and 1.3% respectively in the first and second quarter.”
“Emerging Stocks Are Flashing a 2008 Financial Crisis Signal.
“The price-earnings ratio of the benchmark MSCI Emerging Markets Index, based on trailing 12-month profits, has fallen below its price-earnings ratio based on estimated earnings for the next 12 months, showing that analysts expect earnings to fall faster in the future than currently.”
https://news.yahoo.com/emerging-stocks-flashing-2008-financial-160000267.html
“Rampant Food and Fuel Inflation Spells Disaster for Emerging Economies…
“”The combination of elevated commodity prices and persistent currency depreciations translates into higher inflation in many countries,” the World Bank notes, warning that policymakers in emerging markets and developing economies “have limited room to manage the most pronounced global inflation cycle in decades”.”
“‘Ray of hope’ shatters as Ukraine grain deal collapses…
“Wheat and corn futures jumped today after Russia’s withdrawal from a UN-backed deal that allowed millions of tonnes of grain to be shipped through Black Sea ports, delivering a potentially “catastrophic” blow to food supplies for poorer countries.”
https://www.ft.com/content/5037a123-5895-4cee-83e0-731caf2de204
“With nothing to sell, Vietnam gas stations start to close…
“Since early October, several hundred gas stations in Ho Chi Minh City, the country’s biggest metropolis, and in surrounding cities in southern Vietnam have had to occasionally suspend operations, saying they have nothing to sell.”
“Protesters in Peru target Hochschild’s largest mine.
“Peruvian demonstrators on Monday burned infrastructure at Hochschild Mining Plc’s Inmaculada mine as part of a protest, the company said, threatening the operations of its largest mine in the Andean nation. UK-listed Hochschild is an important precious metals miner and Inmaculada produces both gold and silver.”
https://www.reuters.com/world/americas/protesters-peru-target-hochschilds-largest-mine-2022-10-31/
“Brazil Protests Grow With Bolsonaro Silent After Election Loss.
“Protests by backers of Jair Bolsonaro intensified as the Brazilian president remained silent over his loss in Sunday’s election, refusing to concede defeat to his old foe Luiz Inacio Lula da Silva. Supporters of the firebrand president, unhappy with the election’s results, blocked roads around the country and restricted access to Sao Paulo international airport…”
“Ghana experiences a week of turmoil and panic as it continues to address its economic gash.
“Ghana, for months now has made news rounds over its deteriorating economy. With so much downturn and very little resurgence, the country’s current administration has been forced to quell the growing anxiety amongst its citizens… the Ghanaian Cedi is now the worst-performing currency in the world, losing around 42% against the dollar.”
“Nelson Mandela Bay on the brink of collapse.
“The Nelson Mandela Bay municipality is in dire financial straits and could struggle to pay staff salaries in a few months’ time. This is due to the collection rate dropping to a shockingly low 69%, and millions of rand in lost revenue due to sky-high water and electricity losses.”
https://www.heraldlive.co.za/news/2022-11-01-nelson-mandela-bay-on-the-brink-of-collapse/
“East Africa’s economic recovery falters on debt, fiscal deficits.
“The increasing risk of debt distress, widening fiscal and current deficits and limited economic diversification plans in the economies of East Africa, have combined to weaken prospects for growth this year… countries are yet to achieve their pre-Covid growth levels…”
“Aoun’s presidency ends leaving power vacuum in crisis-hit Lebanon.
“Parliament has so far been unable to agree on a successor in the role, which is reserved for a Maronite Christian [Really?! Come on, Lebanon – why not throw the field open a bit!]… That leaves Lebanon in the unprecedented situation of having a presidential vacuum and a caretaker cabinet with limited powers, as the premier-designate has been unable to form a government for six months.”
“Unseasonal Rains Affecting Crops [India], Will Impact Food Inflation: Report…
“”In states like Uttar Pradesh, the unseasonal rain was more than 400 per cent above the normal. Overall, India has received a staggering 54 per cent above normal rains in October so far,” said SBI Research. It believes that along with grains, the prices of vegetables, milk, pulses and edible oils… are rising and likely to remain high in coming months.”
“A global helium shortage has doctors worried about one of the natural gas’s most essential, and perhaps unexpected, uses: MRIs…
“Helium has become a big concern,” said Mahadevappa Mahesh, professor of radiology at the Johns Hopkins School of Medicine Baltimore. “Especially now with the geopolitical situation.” …The problem is that no other element is cold enough for the MRI. “There’s no alternative,” Craft, of Premier Inc., said. “Without helium, MRIs would have to shut down.””
“Twitter deal may signal point when the ‘everything bubble’ bursts…
“There is a fear the global economy is approaching breaking point. China’s property meltdown, the emergency Bank of England action to prevent a run on pension funds and the collapse of tech stocks are all part of the same story: a fragile global financial ecosystem coming under stress.”
You can read the previous “Economic” thread here. I’ll be back tomorrow with a “Climate” thread.
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