Daily updates on climate change and the global economy.

Daily updates on climate change and the global economy.
Stay current with what’s happening around the world with a quick scan of top news.

Daily updates on climate change and the global economy.
Stay current with what’s happening around the world with a quick scan of top news.

Daily updates on climate change and the global economy.
Stay current with what’s happening around the world with a quick scan of top news.

Daily updates on climate change and the global economy.
Stay current with what’s happening around the world with a quick scan of top news.

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A wave of Chinese deflation will soon be coming our way, bringing peak interest rates into view…

The workshop of the world will again be exporting goods disinflation to Europe and America within months, undercutting Western industries on a large scale. This is likely to deepen the industrial and manufacturing downturn in the West and has powerful implications for interest rates and the trajectory of inflation

“Albert Edwards, from Societé Generale, said… “The recession is going to be so deep that deflation will be a big theme again, and central banks will soon be slashing rates and resuming QE. There is going to be a huge bond rally,” he said.

““Central bankers are like wrestlers before a big fight. They talk tough but you can be absolutely sure they’ll cut aggressively once everybody starts screaming at them,” he said.”

https://www.telegraph.co.uk/business/2022/11/09/wave-chinese-deflation-will-soon-coming-way-bringing-peak-interest/


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China’s factory gate prices suffer first drop since Dec 2020 as COVID curbs take toll.

“China’s factory gate prices for October dropped for the first time since December 2020, and consumer inflation moderated, underlining faltering domestic demand as strict COVID curbs, a property slump and global recession risks hammered the economy.”

https://www.reuters.com/world/china/chinas-oct-producer-prices-fall-first-time-since-dec-2020-consumer-inflation-2022-11-09/


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‘There was no hope’: the Chinese factories struggling to survive…

Factory managers in southern China are reporting a fall in orders in October of as much as 50 per cent on the back of full inventories in the US and Europe, deepening the gloomy outlook for the world’s second-largest economy.”

https://www.ft.com/content/acb7e15f-6243-4ba7-9d49-5ac2b1afe1f9


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Police in northeastern China said that seven people have been arrested following a clash between residents and authorities enforcing COVID-19 quarantine restrictions.

The violence comes as China reports new cases nationwide, with 2,230 cases reported Tuesday in the southern manufacturing and technology hub of Guangzhou.

https://www.pbs.org/newshour/world/protesters-clash-with-chinese-authorities-enforcing-covid-restrictions


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China Property Crisis Imperils $1.6 Trillion of Local State Debt.

“China’s deepening property crisis is piling pressure on a $1.6 trillion corner of the country’s onshore bond market, as cities and local administrations step in as white knights to bail out troubled developers in a state-backed bid to aid the sector.”

https://ca.finance.yahoo.com/news/china-property-crisis-imperils-1-210000032.html


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The bonds of Indonesian property companies are slumping, adding to signs of property debt distress that’s been deepening in China, South Korea and Vietnam…

“Rising interest rates around the world are exposing risks that have accumulated in property markets, juiced by cheap funding during the pandemic. South Korea rolled out fresh measures to help its struggling real estate market on Thursday…”

https://www.bloomberg.com/news/articles/2022-11-10/asian-property-debt-woes-worsen-as-indonesia-shows-more-distress


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Bank of Japan policy may become the most crucial element in deciding the nation’s creditworthiness, S&P Global Ratings said, suggesting the central bank’s action has the potential to trigger its first sovereign credit rating change in years…

“While Tan refrained from discussing what the BOJ should do, he noted that the risk of price declines is “more serious” for Japan’s sovereign ratings than the danger of price increases.

https://www.bloomberg.com/news/articles/2022-11-09/japan-s-credit-ratings-may-hinge-on-boj-policy-changes-s-p-says


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Japan’s current account surplus falls the most since 2008.

“Japan’s current account suffered the biggest year-on-year decline in the first half of this fiscal year since the 2008 global financial crisis, as the trade balance fell into deficit due to a weakening yen and rising global commodity prices.”

https://financialpost.com/pmn/business-pmn/japans-current-account-surplus-falls-the-most-since-2008-2


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Analysis: Meltdown in the Container Shipping Sector Gains Speed…

“If we get back to the meltdown on the Transpacific we see in Xeneta data that it’s a drop of 31% from Far East to US west coast in the month of September compared to the same month last year. We see it is down almost 10% for the first three quarters of the year. This is driven also by a drop of 22% from Far East into north Europe…”

https://www.marinelink.com/news/analysis-meltdown-container-shipping-500816


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US Cut Oil Output Forecast Again as Shale Growth Slows Down…

The US slashed its forecast for 2023 oil production in the latest sign that world crude markets can’t rely on American shale fields to ramp up supply quickly enough to reduce high energy prices over the next year.”

https://www.bloomberg.com/news/articles/2022-11-08/us-sees-oil-growth-slowing-in-2023-will-no-longer-hit-record


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US Mortgage Rates Rise to 7.14%, Near Highest Level Since 2001.

“The overall measure of applications, which includes refinancing, slipped and is the weakest since 1997. An index of refinancing activity fell to a 22-year low. The housing market — one of the most sensitive areas of the economy to changes in interest rates — has deteriorated rapidly this year…

https://www.bloomberg.com/news/articles/2022-11-09/us-mortgage-rates-rise-to-7-14-near-highest-level-since-2001


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Mortgage Fund [Romspen Investment Corp.] in Canada Halts Payouts Amid Liquidity Crunch…

“The Toronto-based firm will “temporarily defer payment” of redemption requests until it’s clearer when borrowers will repay the loans and the fund can get cash from asset sales, according to a letter to investors dated Nov. 8. “Loan payoff activity remains suppressed.””

https://www.bloomberg.com/news/articles/2022-11-09/mortgage-fund-in-canada-halts-payouts-amid-liquidity-crunch


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Sweden Property Firms at Risk of Fire Sales, Handelsbanken Warns.

“Sweden’s beleaguered real-estate companies may have to resort to fire sales and new share issues as the sector faces risks of rising vacancies and a projected 15% slump in property valuations… The catalyst for such a scenario would be the industry’s looming “wall of maturities,” according to the economists.”

https://www.bloomberg.com/news/articles/2022-11-09/sweden-property-firms-at-risk-of-fire-sales-handelsbanken-warns


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[UK] House sales falling at fastest rate since the financial crisis…

“National house prices started to fall in October for the first time in 28 months, with the most notable drops in the East of England and South East. Agents have now reported falling sales in 12 out of the last 14 months and for the last seven consecutively.”

https://www.msn.com/en-gb/money/other/house-sales-falling-at-fastest-rate-since-the-financial-crisis/ar-AA13WyQH


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Nursing union the Royal College of Nursing announces first strike in its 106-year history… The RCN had called for its members to receive a pay rise of 5% above the RPI inflation rate, which currently stands at above 12%.

“The union said that many of the biggest hospitals in England would see strike action but others “narrowly missed” the legal turnout thresholds required for action.”

https://news.sky.com/story/nursing-union-the-royal-college-of-nursing-announces-first-strike-in-its-106-year-history-12742357


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Market uncertainty is causing massive contraction in UK food production, with farmers in nearly every sector planning to scale back in 2023…

“NFU president Minette Batters told the committee… “We are seeing huge contraction in the protected crops sector. Production of tomatoes and cucumbers are at their lowest levels since records began in 1985… Milk volume is down, too, and 75% of the NFU’s livestock farmer members plan to use less nitrogen fertiliser next year, further shrinking output.””

https://www.fwi.co.uk/news/farm-policy/farm-leaders-warn-of-huge-contraction-in-uk-food-production


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UK struggles to secure long-term gas import deals…

“The shortlived Truss administration set up a new “energy supply task force” to begin negotiations with gas exporting countries for long-term supply deals. But negotiations have so far foundered as the Treasury resisted long-term contracts at a time when international gas prices were so high over concerns that they would not prove to be value for money.”

https://www.ft.com/content/d5bf658d-0a6a-4cfd-a46b-3589e64ae5b6


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French pharmaceutical industry worried about potential gas and electricity cuts…

“The representative of the French pharmaceutical industry, The Leem, fears that the industry actors will not be able to “ensure the continuity of their activity” and will not be able to guarantee patients “access to their treatments” in the coming months, a press release published on Monday (November 7) indicates.”

https://www.euractiv.com/section/health-consumers/news/french-pharmaceutical-industry-worried-about-potential-gas-and-electricity-cuts/


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German chemicals giant stockpiles coal to keep producing…

“For energy-intensive industries, this power crisis is “very acute”, says Harald Schwager, deputy chair of Evonik. He likens the situation to a patient “at the doctor”, but while the “diagnosis is known, so is the therapy”. In this case, the therapy is improving supplies.”

https://www.ft.com/content/deb32ffc-05d2-4171-8569-cb9b9ee93300


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Worst of Europe’s Diesel Crunch Will Hit in Spring…

“With the European Union set to cut off seaborne deliveries of Russian fuel in early February, the continent’s already tight supply situation is at risk of worsening. Stockpiles are a vital cushion against such disruptions, and when they run low, there’s more potential for market volatility.”

https://www.bloomberg.com/news/articles/2022-11-09/worst-of-europe-s-diesel-crunch-won-t-hit-until-spring


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Euro Area’s Inflation Shock Weighs Most on Poorest Households.

““Inflation in energy and food prices has major distributional effects across low and high-income households,” the analysts wrote. “Low-income households are more vulnerable to these price shifts, as they spend a higher proportion of their total consumption expenditure on essentials.””

https://www.bloomberg.com/news/articles/2022-11-09/euro-area-s-inflation-shock-weighs-most-on-poorest-households


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Clashes in Greece as strikes over inflation disrupt public transport.

“Thousands of people have protested across Greece amid a general strike against price hikes. Public and some private sector workers walked off the job for 24 hours on Wednesday to protest against rising inflation rates… Small groups of demonstrators threw Molotov cocktails and rocks at police, who responded with tear gas and stun grenades.”

https://www.euronews.com/2022/11/09/clashes-in-greece-as-strikes-over-inflation-disrupt-public-transport


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Vietnam’s central bank has asked commercial banks to urgently provide loans to key oil and gasoline companies amid rising fuel shortages.

“Hundreds of petrol stations in cities such as Ho Chi Minh City and Hanoi have shut down or limited sales. The shortages were driven by firms’ financial difficulties and insufficient fuel storage, media reports said.”

https://www.centralbanking.com/central-banks/financial-stability/7953618/vietnams-central-bank-tells-banks-to-lend-to-fuel-companies


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Malawi Fuel Crisis Shows No End in Sight…

“Drivers in Malawi are spending all night in long lines at fuel stations in hopes of filling their gas tanks as the country struggles with a weekslong fuel shortage… Users also flooded social media with reports of some people being robbed of their phones and other property, and cars being broken into while motorists waited in line for fuel at night.”

https://www.voanews.com/a/malawi-fuel-crisis-shows-no-end-in-sight/6825403.html


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Power vacuum adds to risks for crisis-hit Lebanon.

“Lebanon faces an indefinite government crisis that further complicates the path out of its financial meltdown, adding to risks of instability as hardship deepens and state institutions teeter on the brink of collapse.”

https://www.reuters.com/world/middle-east/power-vacuum-adds-risks-crisis-hit-lebanon-2022-11-09/


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Imran Khan supporters step up protests with road blockades in Pakistan.

“Supporters of Imran Khan have blockaded motorways around Pakistan’s capital Islamabad as they step up their efforts to topple the government following an assassination attempt on the former prime minister… Popular anger over the shooting and the increasingly poisonous tone of public discourse were reaching alarming levels, analysts said.

https://www.ft.com/content/464ee450-5a2c-4ddc-bd08-16bf9ef0de35


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Protests in Iran raged on streets into Thursday with demonstrators remembering a bloody crackdown in the country’s southeast, even as the nation’s intelligence minister and army chief renewed threats against local dissent and the broader world.

Meanwhile, a top official in Iran’s paramilitary Revolutionary Guard claimed it had “achieved” having so-called hypersonic missiles, without providing any evidence.”

https://abcnews.go.com/International/wireStory/iran-protests-rage-streets-officials-renew-threats-93030241


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Iran on November 9 warned Saudi Arabia that there is no guarantee of Tehran continuing to show “strategic patience”, according to semi-official Iranian news agency Fars. The warning to Iran’s regional rival was served by the country’s intelligence minister…

Throughout the eight weeks of anti-regime protests that have shaken Iran, Tehran has accused foreign enemies, including Saudi Arabia, Israel and the US, of fomenting the unrest.”

https://www.bne.eu/iran-warns-saudi-arabia-it-may-lose-strategic-patience-261925/?source=iran


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UN warns of worsening food crisis in Sri Lanka amid economic woes…

“The number of people in Sri Lanka needing urgent humanitarian help has doubled to 3.4 million, the United Nations has said as it warned of a worsening food crisis in the south Asian island nation that declared itself bankrupt in July amid an unprecedented economic crisis.”

https://www.aljazeera.com/news/2022/11/8/un-warns-of-worsening-food-crisis-in-sri-lanka


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Fund managers sound alarm over fragmenting regulation; Deglobalisation strains regulation and investment choices, fund executives say…

As global supply chains have buckled under the pressure of external shocks from the coronavirus pandemic, Russia’s invasion of Ukraine and tensions between the US and China, many companies are now looking closer to home as they consider reversing decades of global outsourcing.

https://www.ft.com/content/f8580286-82e0-403e-9828-d5c063728d1f


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FTX: Cryptocurrency market rocked by near-collapse of exchange.

“The digital assets market has been rocked by the near-collapse of one of the world’s biggest cryptocurrency exchanges, FTX. On Tuesday, FTX struck a bailout deal with larger rival Binance after a surge in withdrawals caused a “significant liquidity crunch”.”

https://www.bbc.co.uk/news/business-63564364


You can read the previous “Economic” thread here. I’ll be back tomorrow with a “Climate” thread.

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