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26th July 2022 Today’s Round-Up of Economic News

World’s Key Workers Threaten to Hit Economy Where It Will Hurt…

A surge in strikes and other labor protests is threatening industries all over the world, and especially the ones that involve moving goods, people and energy around. From railway and port workers in the US to natural-gas fields in Australia and truck drivers in Peru, employees are demanding a better deal as inflation eats into their wages.

“Precisely because their work is so crucial to the world economy right now –- with supply chains still fragile and job markets tight –- those workers have leverage at the bargaining table. Any disruptions caused by labor disputes could add to the shortages and soaring prices that threaten to trigger recessions.”

https://www.bloomberg.com/news/articles/2022-07-24/world-s-key-workers-threaten-to-hit-economy-where-it-will-hurt


U.S. housing cooldown is recession red flag for markets.

“With the Federal Reserve set to jack up interest rates again this week, Wall Street is on alert for signs of recession, and recent housing data suggests the sector may be a harbinger of a cooling economy. Homebuilder stocks, sales and mortgage data show that previously booming housing market is falling back to earth amid a broader economic cooldown.”

https://www.reuters.com/markets/europe/us-housing-cooldown-is-recession-red-flag-markets-2022-07-25/


Recession Worries Grow Among Credit Investors, Survey Shows.

“Credit investors, on average, now see a 53% probability of a U.S. recession, up from 39% in May, according to Bank of America. Over a third of investors surveyed now see a greater than 60% chance of a recession. While inflation still remains investors’ top concern, worries about recession have risen rapidly.”

https://www.wsj.com/livecoverage/stock-market-news-today-25-7-22/card/recession-worries-grow-among-credit-investors-survey-shows-rzCc4OFu0PQ5E39xda0f


Nouriel Roubini says predictions for a mild recession are ‘delusional’ as severe financial crisis looms…

“Nouriel Roubini dismissed hopes that an incoming recession will be shallow. The famed economist, who called the 2008 financial crash, told Bloomberg that the economy is headed for a severe recession as well as a severe debt and financial crisis.”

https://markets.businessinsider.com/news/stocks/us-recession-odds-nouriel-roubini-mild-severe-financial-crisis-predictions-2022-7


The 150% Energy-Price Shock Waiting for the Next UK Leader.

“Every UK prime minister expects to face challenges. Few would imagine that they might have to spend billions of pounds to make sure people don’t freeze in their homes during winter. That’s the dramatic situation Boris Johnson’s successor, either Liz Truss or Rishi Sunak, will face…”

https://www.bloomberg.com/news/articles/2022-07-25/the-150-energy-price-shock-waiting-for-the-next-uk-leader


Britain forced to beg Belgium for power to keep the lights on.

“National Grid was forced to issue an emergency appeal to Belgium to keep Britain’s lights on as the market was roiled by surging prices ahead of a looming winter crisis… Experts said it cast doubt on the Grid’s ability to cope during the “looming iceberg” of winter, when gas supplies are expected to be under far more severe pressure…”

https://www.telegraph.co.uk/business/2022/07/24/britain-forced-beg-belgium-power-keep-lights/


France to fine shopkeepers running heating or air conditioning with doors open.

“Shopkeepers in France who use air conditioning with their doors left open or who leave illuminated signs on at night could be fined hundreds of euros under major new plans to slash energy consumption in the country.”

https://www.independent.co.uk/climate-change/news/france-air-conditioned-shops-fines-b2130504.html


Germany on cusp of recession, says Ifo, as business sentiment sinks.

“German business morale fell more than expected in July, the Ifo business sentiment survey showed on Monday, as the institute that compiles it said high energy prices and looming gas shortages had left Europe’s largest economy on the cusp of recession.”

https://www.reuters.com/markets/europe/germany-cusp-recession-says-ifo-after-business-sentiment-falls-2022-07-25/


German industry cuts production due to high energy prices: DIHK survey.

“A number of industrial companies in Germany are cutting production in reaction to soaring energy prices, a survey by the country’s Chambers of Industry and Commerce (DIHK) showed on Sunday… Russia’s invasion of Ukraine in February has had major implications for governments and businesses across Europe…”

https://www.hellenicshippingnews.com/german-industry-cuts-production-due-to-high-energy-prices-dihk-survey/


Russia’s Gazprom to make drastic cut to Europe’s gas supply from Wednesday…

“The Russian gas export monopoly said it was halting the operation of one of the last two operating turbines due to the “technical condition of the engine”, cutting daily gas deliveries via the Nord Stream pipeline to 33m cubic metres a day – about 20% of the pipeline’s capacity [ie insufficient to fill winter storage].”

https://www.theguardian.com/world/2022/jul/25/russias-gazprom-to-make-drastic-cut-to-europes-gas-supply-from-wednesday


Ukraine war, energy crisis and Italy’s political turmoil call euro’s survival into question.

“Who would blame anyone for thinking that Europe is finished? Russian President Vladimir Putin might have achieved his aim to crack European unity, with the economy suffering on a number of fronts. The war in Ukraine, the energy crisis and political turmoil in Italy are throwing the European Union into chaos and it’s no surprise that the euro is in deep trouble.”

https://www.scmp.com/comment/opinion/article/3186443/ukraine-war-energy-crisis-and-italys-political-turmoil-call-euros


Italy preparing stimulus package worth up to $13.3 billion, Treasury official says.

“Italy is preparing a new stimulus decree worth up to 13 billion euros ($13.3 billion) to help families and firms deal with a surge in electricity, gas and petrol costs, deputy Economy Minister Laura Castelli said on Monday. The new scheme, which comes on top of some 33 billion euros already budgeted since January…”

https://www.reuters.com/markets/europe/italy-preparing-stimulus-package-worth-up-133-bln-treasury-official-2022-07-25/


More than 1,000 migrants arrive in Italy within hours, authorities say.

“On the island of Lampedusa, some 522 people from Afghanistan, Pakistan, Sudan, Ethiopia and Somalia, among others, arrived from the late hours of Saturday in 15 different boats from Tunisia and Libya… the island’s reception centre has been overwhelmed… The latest inflow of migrants comes at a politically sensitive time in Italy.

https://www.france24.com/en/europe/20220724-more-than-1-000-migrants-arrive-in-italy-within-hours-authorities-say


A new wave of migration is coming – and Europe is not ready for it.

“In a week when Russia threatened to annex more territory in Ukraine, gas shortages loomed, and inflation and Covid surged across Europe, it seems almost unkind to remind EU and UK leaders of another crisis that is unfolding, largely unremarked, right under their noses… Europe now also faces rapidly rising new “waves” of undocumented asylum seekers.”

https://www.theguardian.com/commentisfree/2022/jul/24/europe-migration-new-wave


China’s Property Crisis Burns Middle Class Stuck With Huge Loans…

“Now, as property developments stall across the country and house prices fall, many Chinese homeowners are slashing spending, postponing marriage and other life decisions, and, in a growing number of cases, withholding mortgage payments on unfinished homes.”

https://www.bloomberg.com/news/articles/2022-07-24/china-s-property-crisis-burns-middle-class-stuck-with-huge-loans


China’s Slowdown Spills Over to Major Economies Through Imports…

“Elevated global commodity prices meant that China’s official import growth of 1% in June from a year earlier hid a worse result for manufactured goods. Imports of hi-tech products and mechanical and electrical goods fell about 8% last month, according to recently released Chinese customs data. There doesn’t seem to have been an improvement this month…”

https://www.bloomberg.com/news/articles/2022-07-25/china-s-slowdown-spills-over-to-major-economies-through-imports


Argentines turn to black market dollars as crisis worsens.

“Confidence in the Argentine economy is evaporating as the government struggles with political infighting, an ever-increasing pile of domestic debt and inflation hurtling towards 90 per cent. The US dollar has shot to new highs on the black market…”

https://www.ft.com/content/a27ee254-6042-4632-a161-8ae005bdab1c


Inflation-hit Zimbabweans forced to find side hustles to survive…

“Surging food and fuel prices have revived memories of the hyperinflation that plagued the southern African nation in the late 2000s, sparking labour unrest and prompting the central bank to start selling gold coins this month.”

https://www.newzimbabwe.com/inflation-hit-zimbabweans-forced-to-find-side-hustles-to-survive/


Uganda police fire teargas to quell protest over fuel prices.

“Police arrested more than 40 people in Uganda on Monday as security forces used teargas and “other tactics” to quell a large protest against sky-high fuel prices, a police spokesman said.”

https://www.reuters.com/world/africa/uganda-police-fire-teargas-quell-protest-over-fuel-prices-2022-07-25/


Arrests as Madagascar Opposition Protest Living Costs…

“Several hundred anti-government demonstrators gathered in the center of Antananarivo in the morning, watched by a heavy military and police presence. Police said they arrested Rina Randriamasinoro, the secretary general of the opposition Tiako I Madagasikara (TIM) party, and its national coordinator Jean-Claude Rakotonirina…”

https://www.voanews.com/a/arrests-as-madagascar-opposition-protest-living-costs-/6671485.html


Tunisia’s Saied holds referendum, critics fear for democracy.

Economic decline since 2011 has left many people angry at the parties that have governed since the revolution and disillusioned with the political system they ran. A turnout on Monday far below that rate [of 41% in 2019] would further call into question the legitimacy of the new constitution.”

https://www.euronews.com/2022/07/25/uk-tunisia-politics-referendum


Hamas-run government in Gaza to reduce salaries amid growing financial crisis…

“Speaking to The New Arab, Awni al-Basha, undersecretary of the Gaza Finance Ministry, said that reducing employees’ salaries was a decision born out of an emergency and seeks to temporary alleviate the government as financial crises worsens.”

https://english.alaraby.co.uk/news/hamas-govt-gaza-reduces-salaries-amid-financial-crisis


Shortages leave bankrupt Sri Lanka’s hospitals empty.

“Entire wards are dark and nearly empty in Sri Lanka’s largest hospital, its few remaining patients leaving untreated and still in pain, and doctors prevented from even arriving for their shifts. An unprecedented economic crisis has dealt a body blow to a free and universal healthcare system that just months earlier was the envy of the country’s South Asian neighbours.”

https://www.france24.com/en/live-news/20220726-shortages-leave-bankrupt-sri-lanka-s-hospitals-empty


The madness of the oil market. In the past two years, oil has been traded as cheaply as $19 a barrel (or below zero if you were buying a US blend called West Texas Intermediate) and as high as $139 a barrel

We have not seen such huge swings in the oil price since the 2008 financial crisis, when oil crashed from $150 a barrel to below $40 as fears of a global recession saw demand collapse. [Highly stressed global economic superorganism is suffering labile hypertension, we could say.]”

https://www.ft.com/content/2a2571f4-b4bc-4587-8028-b6084a07a827


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

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23rd July 2022 Today’s Round-Up of Economic News

The Energy Crisis Is Global… eye-watering prices are wreaking havoc around the world…

““We are experiencing the first global energy crisis,” said Jason Bordoff, an energy expert at Columbia University, who noted that the crunch has hit almost all of the world’s regions and energy sources. “The ripple effects are being seen globally, and I don’t think we’ve seen the worst of it yet.””

https://foreignpolicy.com/2022/07/22/global-energy-crisis-natural-gas-fuel-shortage-power-cut/


Global slowdown fears darken as cost of living bites.

“The global economy looks increasingly likely to be heading into a serious slowdown, just as the highest inflation in a generation prompts central banks to aggressively reverse the ultra-loose monetary policy adopted during the pandemic to support growth, [business activity] data showed on Friday.”

https://www.todayonline.com/world/global-slowdown-fears-darken-cost-living-bites-1950726


Philadelphia Fed Factory Outlook Falls to Lowest Since 1979…

“Philadelphia-area manufacturers’ outlook for business conditions slumped this month to the lowest level since 1979 as gauges of future new orders and planned capital expenditures both deteriorated… “A US recession around the end of this year and early next is now likely.”

https://www.bloomberg.com/news/articles/2022-07-21/philadelphia-fed-factory-outlook-falls-to-lowest-since-1979


Natural gas prices rising in US, dampening hopes for lower inflation.

“The price of natural gas in the US has risen by nearly half in the past month, as drought and the war in Ukraine continue to bite and millions of Americans turn up their air conditioners in a heatwave. Natural-gas futures jumped 48% this month, including 10% on Wednesday…”

https://www.theguardian.com/business/2022/jul/21/natural-gas-prices-rising-us-inflation


Britain faces a summer of strikes as historic inflation and falling real wages bite…

“Workers across pillars of the economy have been voting for industrial action over below-inflation pay offers — including transport workers, firefighters, doctors, nurses, teachers, postal workers, civil servants, lawyers and British Telecoms engineers.”

https://www.cnbc.com/2022/07/22/uk-faces-a-summer-of-discontent-as-inflation-and-real-wage-declines-stoke-strikes.html


UK debt interest payments jump to all-time high.

“Debt interest payments rose to £19.4bn last month, £10.3bn more than in June last year…

A quarter of the UK’s government debt is index-linked, so the cost of servicing it is pushed up by inflation, which is running at a 40-year high.”

https://www.ft.com/content/6a7f5b1f-5110-4d36-a912-4ceb5a480eb2


European Central Bank raises interest rates for first time in 11 years. In a surprise move, the ECB pushed its base rate up by 0.5 percentage points, after economists had expected a smaller 0.25 point rise.

“Joining the US Federal Reserve and Bank of England in the fight against inflation, the ECB said the increase was necessary after a surge in food and fuel costs that shows no signs of easing in the next few months.”

https://www.theguardian.com/business/2022/jul/21/european-central-bank-raises-interest-rates-for-first-time-in-11-years


Eurozone: PMI drops below 50 in July, confirming recession worries.

“The sharp decline in the composite PMI from 52 to 49.4 indicates that recessionary pressures are becoming more widespread in the eurozone economy. For the European Central Bank, this confirms our view that it will only hike another 50 basis points in total this year.”

https://think.ing.com/snaps/eurozone-pmi-drops-below-50-in-july-confirming-recession-worries/


Germany will bail out gas importer Uniper, Chancellor Olaf Scholz said Friday, promising to do “what is necessary and as long as it is necessary” to help keep the country afloat amid fears of a Russia-driven energy crisis.

“Speaking to reporters in Berlin, Scholz — who interrupted his summer holidays in the Bavarian Alps for the announcement — said his government would acquire 30 percent of Uniper, Germany’s biggest gas importer, as well as provide €7.7 billion in government support…”

https://www.politico.eu/article/scholz-vow-do-whatever-take-resist-russian-blackmail-germany-bail-out-uniper/


Southern rebellion threatens to sink EU gas rationing plan.

“A group of European Union countries mainly from the south has already shot down Brussels’ bid to grant itself the power to ration gas around the bloc less than 24 hours after the debut of the proposal Wednesday… ministers in Poland, Portugal, Spain, Cyprus and Greece have already emphatically said “no” to the proposed power grab…”

https://www.politico.eu/article/poland-portugal-spain-syprus-greece-rebellion-eu-gas-rationing-rules/


Draghi unseated by cost of living crisis… The collapse of Mario Draghi’s government will be blamed on conditions peculiar to Italy…

“In reality the forces that brought down “Super Mario” this week apply well beyond Italy’s borders. The immediate cause is the cost-of-living crisis — and the way that crisis has sharpened the contradiction between the expectations of the mass of the people and the imposition, by government, of economic policies which push in the opposite direction.”

https://morningstaronline.co.uk/article/e/draghi-has-been-unseated-cost-living-crisis-which-europes-leaders-have-no-answer


China’s Credit Market Rocked by More Debt Delays, Plunging Bonds.

“China’s credit market is now showing stress on an almost daily basis, as a worsening property crisis shatters assumptions about safe borrowers and even Chinese investors turn against troubled debtors… State-linked South City warns may default without extension… Brilliance Auto fails to push through restructuring proposal…”

https://www.bloomberg.com/news/articles/2022-07-21/distressed-developer-china-south-city-seeks-delay-on-dollar-debt


Angry Evergrande suppliers join China ‘mortgage strike’ protest…

“A group of angry suppliers to China Evergrande Group are threatening to stop paying their bank loans to protest the struggling developer’s unpaid bills, hitting a property sector already reeling from a mortgage-payment boycott… The troubled company has a vast network of suppliers nationwide for its projects…”

https://asia.nikkei.com/Business/Markets/China-debt-crunch/Angry-Evergrande-suppliers-join-China-mortgage-strike-protest


Rise in gasoline prices threatens social stability and food security in Latin America…

“Rising fuel prices have already brought about protests in Argentina, Ecuador and Panama. Their neighbors could be particularly susceptible to rising prices at the pump, because the region lacks alternative means of transportation, such as railways and waterways that are more common in Europe and North America — and guzzle less fuel.”

https://edition.cnn.com/2022/07/22/economy/rising-gasoline-prices-security-latin-america-intl-latam/index.html


Namibia: Strikes and protests in response to escalating fuel prices possible nationwide through mid-August…

“The National Transport and Taxi Union, which represents taxi operators, has threatened to go on an indefinite nationwide strike from July 26; it has called on the government to increase fare prices. The Seven-Seater Association has also indicated that it would cease operations. Fuel station owners have also reportedly threatened to close…”

https://crisis24.garda.com/alerts/2022/07/namibia-strikes-and-protests-in-response-to-escalating-fuel-prices-possible-nationwide-through-mid-august


Protests have rocked towns and cities in Mauritania after the government decided to hike up fuel prices last Friday.

“Mauritania’s energy minister told state media last week that the government had decided to raise the price of petrol and gas oil because a global rise in oil prices, exacerbated by Russia’s invasion of Ukraine, was denting the Mauritanian state budget.”

https://english.alaraby.co.uk/news/protests-mauritania-government-hikes-fuel-prices


Cameroonians queue for fuel as shortages hit the capital.

“Most fuel stations have run out of diesel in recent days and those that have are now rationing it. “You line up for 4 hours, 5 hours, I’ve been here since 6 o’clock,” said Nkeudeu, a transporter. “There is already no fuel at other stations and where we find a little bit of petrol, we are told we can’t fill our tanks,” said Moffo Koumeni, a cab driver.”

https://www.africanews.com/2022/07/22/cameroonians-queue-for-fuel-as-shortages-hit-the-capital//


Nigeria Unable To Benefit From High Oil Prices…

“Nigeria’s oil revenue problem didn’t stem from a drop in production. Instead, Nigeria continues to battle oil theft, pipeline vandalism, and most critically, high gasoline prices, which the country subsidizes. The severe revenue shortfall does not allow Nigeria to service its debt.”

https://oilprice.com/Latest-Energy-News/World-News/Nigeria-Unable-To-Benefit-From-High-Oil-Prices.html


Clashes broke out in the Libyan capital, Tripoli, overnight, between militia forces just days after a deal that saw the country relaunch oil production and exports after a months-long force majeure.

“At least nine people had been confirmed dead and 25 injured, according to various local media reports, by Friday morning, with civilians caught in the crossfire between two militia groups…”

https://oilprice.com/Latest-Energy-News/World-News/Clashes-Break-Out-In-Tripoli-As-Libya-Resumes-Oil-Exports.html


Smouldering Beirut port silo at risk of collapse as grain ignites…

“While the Lebanese look on helplessly as the last of the wheat stored in the silo burns, mills and bakeries around the country are struggling with an acute shortage of subsidized flour used to make Lebanese pita bread.”

https://www.arabnews.com/node/2127696/middle-east


Farmers in Syria feel the brunt of poor wheat harvest…

“Similar to last season, he said the harvest had been hit by a delay in the onset of rainfall, prolonged seasonal dry spells, and a devastating early cessation of rainfall.

“Crops were also affected by weather anomalies including frost and sharp rise in temperatures.”

https://middle-east-online.com/en/farmers-syria-feel-brunt-poor-wheat-harvest


Pakistan’s rupee falls fast as default fears intensify…

“The latest slide reflected mounting concerns that a $1.2bn loan disbursement from the IMF agreed last week might not be enough to avert a balance of payments crisis. Pakistan’s bonds have been among the worst performers in emerging markets this year.”

https://www.ft.com/content/31f9fbd5-996a-4c24-8c5d-3fcf824c0d93


Worries Rise for India’s Economy as Rupee Falls Past 80 a Dollar.

“The Indian rupee’s decline to a lifetime low is adding to angst over imported inflation as well as an external deficit blowout, prompting analysts to draw parallels with the taper tantrum of 2013. The local currency is the third-worst performer in Asia in the past month…”

https://www.bloomberg.com/news/articles/2022-07-22/worries-rise-for-india-s-economy-as-rupee-falls-past-80-a-dollar


Sri Lankan troops tear down protest camp outside the President’s office.

“Sri Lanka’s police and military troops forcibly removed anti-government protesters camped outside the presidential office in Colombo in a pre-dawn raid on Friday on the order of the country’s new President. Social media posts showed officers dressed in riot gear pulling down protest tents and arresting demonstrators…”

https://edition.cnn.com/2022/07/22/asia/sri-lanka-galle-face-protest-raid-intl-hnk/index.html


Heatflation: How high temperatures drive up food prices…

“Even when the heat has not caused obvious damage, the impact of such extreme weather can have lasting effect, especially on food production. The result is likely to be “heatflation”, unusually hot temperatures causing smaller harvests and rising food prices.”

https://www.france24.com/en/europe/20220721-heatflation-how-high-temperatures-drive-up-food-prices


You can read the previous ‘Economic’ thread here. I’ll be back on Monday with a ‘Climate’ thread.

If you found value in this content, please help me continue this work by becoming a patron of my work via Patreon. And if you are already a subscriber or have donated – thank you! It is a huge help, especially as the cost of living crisis is biting here in the UK.

21st July 2022 Today’s Round-Up of Economic News

Video Shows Tanks Protecting Crisis-Hit Banks In China, Internet Says “History Repeats Itself”.

“…users on Reddit say that the footage is from Rizhao, in Shandong Province and the tanks have been deployed to protect the local branch of a bank at the heart of a scandal… An investigation into the banking scandal is going on.” *this article is inaccurate; my apologies. Please see my comment in the comment section below

https://www.ndtv.com/world-news/video-shows-tanks-protecting-crisis-hit-banks-in-china-internet-says-history-repeats-itself-3175812


China’s debt bomb looks ready to explode…

“Perhaps because Beijing seems to be able to defy financial gravity, fewer people these days worry that its ballooning debt could unleash a systemic crisis. But there are many warning signs indicating that China may face a debt reckoning soon.”

https://asia.nikkei.com/Opinion/China-s-debt-bomb-looks-ready-to-explode


China’s credit markets are creaking under the pressure of more setbacks, as a crisis in the nation’s property market fuels concerns about broader contagion.

“Chinese junk dollar bonds hovered near record lows Thursday. A partially state-backed firm sought delays paying its $1.6 billion of dollar notes, showing not even such borrowers are immune.”

https://www.yahoo.com/news/distressed-developer-china-south-city-002746519.html


China reckons with its first overseas debt crisis…

“A Financial Times examination of the financial health of the Belt and Road Initiative — once hailed by Chinese leader Xi Jinping as the “project of the century” — has uncovered a mountain of non-performing loans. In several countries in Asia, Africa and Latin America, the project risks metastasising into a series of debt crises.”

https://www.ft.com/content/ccbe2b80-0c3e-4d58-a182-8728b443df9a


Laos’s Economic Crisis Spiralling out of Control, as it Struggles With Massive Debts to China.

“… in recent months, Laos’ economy has crashed. Inflation of basic goods is skyrocketing, staple goods like cooking oil are becoming scarce, and the local currency is collapsing against the dollar. Laos, whose credit rating was downgraded by Moody’s in June to junk rating, is now near default on its sovereign debts.”

https://www.cfr.org/blog/laoss-economic-crisis-spiraling-out-control-it-struggles-massive-debts-china


The world isn’t prepared for a wave of sovereign debt defaults. Many emerging markets will need painful bond writedowns from China and private creditors…

“Resolving the forthcoming emerging market debt crisis is likely to be even slower and more painful than usual now that China is involved.”

https://www.ft.com/content/c4d17d8e-66f6-48fb-9a64-c8ebdfd46dcb


US Housing Affordability Is Set to Drop to 2007 Levels This Year, S&P Says…

“By the end of this year, mortgage payments will make up 28% of income for the typical first-time buyer — the highest since the first quarter of 2007 — assuming a 10% down payment, S&P North American Chief Economist Beth Ann Bovino said in a report.”

https://www.bloomberg.com/news/articles/2022-07-20/housing-affordability-to-drop-to-2007-levels-this-year-s-p-says


The Oakland International Container Terminal management closed operations on Wednesday at the Port of Oakland due to the independent trucker protests over California’s gig worker law, known as AB5.

“The Port’s other three marine terminals are effectively shut down for trucks as well… This is the third-day truckers have protested California’s gig worker labor law… These are the largest trucker protests to date over the law.”

https://www.cnbc.com/2022/07/20/trucker-protests-over-gig-worker-law-shut-port-of-oakland-terminals.html


UK inflation at 40-year high fuels simmering discontent…

“The bigger than expected increase in the year to June of 9.4 per cent, the highest in the G7, was driven by sharp rises in the prices of food, up 9.8 per cent, and petrol prices, up 18.1 pence per litre, the biggest jump since records began in 1990.”

https://www.ft.com/content/8644ddb1-2fbe-40f6-9f69-c29c31bb1539


Russia’s military focus in Ukraine is no longer “only” the east, Foreign Minister Sergei Lavrov has said.

“In an interview with Russian state media, he implied Moscow’s strategy had changed after the West supplied Ukraine with longer-range weapons. Russia would now have to push Ukrainian forces further from the front line to ensure its own security, he explained.”

https://www.bbc.co.uk/news/world-europe-62231936


Russia resumes gas supply to Europe via Nord Stream at lower capacity… Resumption of 40% of supplies is insufficient to ward off energy crisis in Europe this winter, say experts

“The European Commission on Wednesday urged EU countries to reduce demand for natural gas by 15% over the coming months to secure winter stocks and defeat Russia’s “blackmail”.”

https://www.theguardian.com/business/2022/jul/21/russia-resumes-gas-supply-to-europe-via-nord-stream-at-lower-capacity


Gas rationing will not save Europe from a winter crisis… The European Commission insists acting now, while gas demand is lower during summer, will reduce the overall economic impact and help ease market concerns.

Damage is already being done, however. “Some of these measures will cost industry a lot,” says Jacob Mandel, at Aurora Energy. Goldman Sachs adds: “Substitution towards fuels like oil or coal for industrial boilers would not be without its challenges.””

https://www.telegraph.co.uk/business/2022/07/21/gas-rationing-will-not-save-europe-winter-crisis/


Europe’s Power Crunch Cuts Zinc and Aluminum Capacity in Half.

“Europe has lost about half of its zinc and aluminum smelting capacity within the past year, and a further surge in power prices could knock more plants offline over winter, the region’s biggest metal producers warned.”

https://www.bloomberg.com/news/articles/2022-07-20/europe-s-power-crunch-cuts-zinc-and-aluminum-capacity-in-half


Europe Does A Complete U-Turn On African Oil And Gas.

“As European governments race to secure every drop of natural gas that they can, consumers in countries like Nigeria and Mozambique are losing out. The hypocrisy of Europe asking for oil and gas from countries that, just last year, it had told to keep fossil fuels in the ground only makes it harder to take.

https://oilprice.com/Energy/Energy-General/Europe-Does-A-Complete-U-Turn-On-African-Oil-And-Gas.html


ECB Faces the Classic Emerging-Market Dilemma.

“The ECB will be pressured to maintain its hawkish stance — even when data deteriorate and a Europe-wide recession sets in — as the risk of capital outflows mounts… Europe’s once formidable balance-of-payments surplus with the rest of the world is diminishing rapidly.”

https://financialpost.com/pmn/business-pmn/ecb-faces-the-classic-emerging-market-dilemma


Italy’s financial markets are bracing for investors’ reaction on Thursday to the collapse of the government of Prime Minister Mario Draghi…

““Italy’s political crisis unfolds just as the European Central Bank (ECB) prepares to unveil its anti-fragmentation tool. One needs to hope markets will perceive it as sufficiently bold because, if not … Italy could well be in the markets’ cross-hairs given the situation.”

https://financialpost.com/pmn/business-pmn/italy-faces-market-test-after-draghis-govt-crumbles


Japan bought its most expensive ever natural gas shipment as an escalating global energy crunch brings new risks of blackouts and intensifies competition for fuel imports.

“Nippon Steel Corp. purchased a liquefied natural gas cargo for delivery in September in the low-$40 per million British thermal units range, according to traders with knowledge of the matter.”

https://www.bloomberg.com/news/articles/2022-07-19/japan-buys-most-expensive-gas-shipment-as-energy-crunch-bites#xj4y7vzkg


Three weeks of continuous demonstrations and road blockades to protest high fuel and food costs in Panama have begun to cause shortages of some food products, fuel and medicine.

“The closures, including of the Pan-American Highway, have forced the national electric company to ration electricity in Darien province, which borders Colombia.”

https://abcnews.go.com/International/wireStory/weeks-protests-panama-food-fuel-shortages-87141880


Cuba blackouts bring misery amid sweltering heat.

“Long and frequent blackouts coupled with sweltering summer heat are bringing misery to many in Cuba, which has been suffering power outages for months amid rising oil prices and a deepening economic crisis. And things are unlikely to get better any time soon…”

https://www.france24.com/en/video/20220720-cuba-blackouts-bring-misery-amid-sweltering-heat


Hundreds protest to demand Puerto Rico scrap contract with power grid operator…

“Demonstrators including union leaders and community activists say LUMA has steadily increased power rates despite frequent outages including one in April that left more than one- third of the island in darkness.”

https://www.swissinfo.ch/eng/hundreds-protest-to-demand-puerto-rico-scrap-contract-with-power-grid-operator/47769166


Across Haiti, fuel shortages and power outages bring life to a halt.

“In addition to their deadly battles in Port-au-Prince, where at least 234 people have been killed or injured in the Cite Soleil neighborhood since early July, Haitian gangs have also hampered activity at the country’s three main oil terminals.”

https://www.rfi.fr/en/international-news/20220721-across-haiti-fuel-shortages-and-power-outages-bring-life-to-a-halt


Price Pressures Build in Nigeria as Diesel Costs Surge 200%…

“Nigerian businesses and most of its population rely on the fuel because of a shortage of power. Poor maintenance and insufficient investment in the transmission network have resulted in only about a third of the country’s installed capacity being dispatched by the grid daily — a fraction of what’s needed…”

https://www.bloomberg.com/news/articles/2022-07-20/price-pressures-build-in-nigeria-as-diesel-costs-surge-200


South Africa’s power cuts take a toll on mental health.

“You can’t do your work because there’s no power. You eat late and bolt your food before the lights fail. And then to be at home, in the utter dark, gives you the creeps… in recent weeks, the country has been hit by rolling blackouts that can last up to nine hours a day.”

https://www.france24.com/en/live-news/20220720-south-africa-s-power-cuts-take-a-toll-on-mental-health


Zimbabweans Preparing for Mass Protests.

“Crisis in Zimbabwe Coalition’s Peter Mutasa says Zimbabweans will map the way forward on Thursday after giving the Emmerson Mnangagwa government a notice to stage peaceful protests in the country. Mutasa says they will go to court if the police deny them permission…”

https://www.voazimbabwe.com/a/zimbabweans-preparing-for-mass-protests/6667032.html


Employees at Lebanon’s central bank have begun a three-day strike after a prosecuting judge attempted to arrest the bank’s governor…

“Aoun has charged Salameh with falsifying the budget of Lebanon’s central bank to hide losses… The judge told Al Jazeera on Wednesday that she was uncertain about whether she would try to arrest Salameh again.”

https://www.aljazeera.com/news/2022/7/20/lebanon-central-bank-workers-strike-after-judge-raids-hq


Sri Lanka braced for more unrest as new president vows crackdown on ‘fascist’ protests…

“Speaking after being MPs picked him as successor to Gotabaya Rajapaksa, Wickremesinghe made it clear he would not tolerate those he perceived to be stirring up violence. “If you try to topple the government, occupy the president’s office and the prime minister’s office, that is not democracy; it is against the law,” he said.”

https://www.theguardian.com/world/2022/jul/21/sri-lanka-unrest-new-president-crackdown-protests


End of the line: Fed-up Sri Lankans rush for passports.

“One of the longest queues in the Sri Lankan capital Colombo is for the exit, as thousands of people line up outside the immigration office seeking passports to escape the country’s economic crisis. Every day, about 3,000 people submit their papers and 15,000 rupees (USD 42) to obtain travel documents.”

https://www.france24.com/en/live-news/20220721-end-of-the-line-fed-up-sri-lankans-rush-for-passports


Global chip shortage far from over and now semiconductor market faces slowdown.

“The global shortage of semiconductors might not be over yet, at least according to IDC, but a slowdown in the market is coming as consumer demand falls away and the supply side faces a new heap of challenges.”

https://www.theregister.com/2022/07/20/global_chip_shortage_not_over/


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

If you found value in this content, please help me continue this work by becoming a patron of my work via Patreon. And if you are already a subscriber or have donated – thank you! It is a huge help, especially as the cost of living crisis is biting here in the UK.

19th July Today’s Round-Up of Economic News

Global Central Banks Ramp Up Inflation Fight.

“Central bankers around the world are lifting interest rates at an aggressive clip as rapid inflation persists and seeps into a broad array of goods and services, setting the global economy up for a lurch toward more expensive credit, lower stock and bond values and — potentially — a sharp pullback in economic activity.

It’s a moment unlike anything the international community has experienced in decades, as countries around the world try to bring rapid price increases under control before they become a more lasting part of the economy.”

https://www.nytimes.com/2022/07/17/business/economy/global-central-banks-inflation.html


Strongest dollar in a generation upends global economy, devalues currencies.

“The dollar lubricates the global economy. It is one side of about 90 per cent of all foreign exchange transactions… Many companies and governments abroad borrow in dollars, and the currency’s strength is a big problem. This is particularly true for poorer countries attracted to dollar-denominated debt as an alternative to less developed local markets.”

https://www.business-standard.com/article/international/strongest-dollar-in-a-generation-upends-global-economy-devalues-currencies-122071700950_1.html


A monstrously strong dollar is stalking the markets…

“Even now, only hard-core deflationists understand the dire implications that a strong dollar holds for mountainous debts that have piled up around the world. Nor is it generally understood why hyperinflation is an extremely unlikely option for liquidating this debt, since it would destroy creditors – i.e., the Masters of the Universe – as a class. Deflation is not only far more logical, it already appears to have begun…”

https://www.fxstreet.com/analysis/a-monstrously-strong-dollar-is-stalking-the-markets-202207180105


US Pulls Plug on Fertilizer Trade War as Food Inflation Bites.

“The US International Trade Commission ruled Monday it will not impose tariffs on Russian and Trinidadian imports of urea ammonium nitrate, which is used in liquid fertilizers. The decision came as a surprise…”

https://www.bloomberg.com/news/articles/2022-07-18/us-pulls-plug-on-fertilizer-trade-war-amid-inflation-threat


Long Lines Are Back at US Food Banks as Inflation Hits High.

“Long lines are back at food banks around the U.S. as working Americans overwhelmed by inflation turn to handouts to help feed their families. With gas prices soaring along with grocery costs, many people are seeking charitable food for the first time, and more are arriving on foot.

https://www.voanews.com/a/long-lines-are-back-at-us-food-banks-as-inflation-hits-high/6660071.html


Why Desperate Car Thieves Are Now ‘Drilling’ For Gas…

“The NICB reports that petty crooks have begin drilling directly into parked cars’ gas tanks to drain the liquid gold. That not only leaves an owner without several gallons of gas, but triggers steep repair bills to have the tank replaced.”

https://www.forbes.com/sites/jimgorzelany/2022/07/18/why-desperate-car-thieves-are-now-drilling-for-gas/


Britons have seen regular pay fall by nearly 3 per cent – the largest decrease since records began.

“The Office for National Statistics (ONS) have released their latest assessment on average weekly earnings as the UK grapples with soaring inflation and a cost of living crisis.”

https://www.independent.co.uk/news/uk/home-news/uk-inflation-employment-pay-ons-b2126218.html


More strike hell could grip UK as two million public sector workers are expected to be given below-inflation pay rises…

“Whitehall sources said that pay review bodies covering doctors, nurses, soldiers, the police and a string of other professions will recommend settlements of three to five per cent. But this is far shorter than the 16% that nurses are demanding, the Royal College of Nursing said…”

https://www.dailymail.co.uk/news/article-11026031/Public-sector-pay-rises-capped-5-tame-inflation-sources-say.html


Russia Ban Seen Tightening Coal Market That’s Already Surging…

“The European ban that takes effect next month “is expected to tighten further the supply of high quality thermal coal,” Sydney-based Whitehaven said in its statement. “We continue to view thermal coal prices as well supported for 2022 and into 2023.””

https://www.bloomberg.com/news/articles/2022-07-18/russia-ban-seen-tightening-coal-market-that-s-already-surging


Poland to give households one-off payment to offset rising coal prices…

“Due to their high quality, Russian coal imports were mainly used by individual households and heating plants in smaller towns before they were banned in April. The subsequent spike in prices cause by the shortfall has left many Poles fearing they will be unable to heat their homes in winter.”

https://www.reuters.com/markets/europe/poland-give-households-one-off-payment-offset-rising-coal-prices-2022-07-19/


Russia’s Gazprom tells European buyers it cannot guarantee gas supplies.

“Russia’s Gazprom has told customers in Europe it cannot guarantee gas supplies because of “extraordinary” circumstances, according to a letter seen by Reuters, upping the ante in an economic tit-for-tat with the west over Moscow’s invasion of Ukraine.”

https://www.theguardian.com/business/2022/jul/18/russias-gazprom-tells-europe-cutoff-of-gas-beyond-firm-control-force-majeure-letter-nord-stream-pipeline


IEA warns Europe must cut gas consumption immediately.

“The International Energy Agency has warned Europe must take immediate steps to reduce gas consumption ahead of the winter, urging governments to cap air conditioning use and start auctioning gas to industry or risk rationing during the coldest months.”

https://www.ft.com/content/0b42d3c8-e5ab-4be7-ae1c-1b973e0f47d5


German utility group Uniper on Monday applied to extend its 2 billion euro ($2.03 billion) credit line with state-owned lender KfW after drawing down the full amount in response to supply shortfalls of Russian gas.

“Uniper said it also proposed to activate a legal mechanism that would allow it to pass on increased procurement costs to customers, and the state to take a “relevant stake” in it.”

https://www.reuters.com/business/energy/uniper-seeks-extend-state-credit-facility-company-2022-07-18/


Europe’s Energy Crisis Will Cost You $200 Billion — Probably More.

“It’s a falling chain of energy dominoes — one in which each tile is worth many billions of euros. A failed utility here, a nation’s supply there. When the dust settles, the total bill for rescuing the European energy market this winter will easily top $200 billion… Very few politicians seem to grasp the magnitude of the coming crisis and its costs…”

https://www.bloomberg.com/opinion/articles/2022-07-18/europe-energy-crisis-bailout-will-top-200-billion-if-russia-cuts-gas-supply#xj4y7vzkg


The eurozone’s central bank is set to hike interest rates for the first time in 11 years [0.25%] – but risks getting left behind as peers push ahead in the fight against inflation

“…this will still leave its base rate in negative territory, at minus 0.25 per cent, meaning lenders are effectively being charged to keep money with the ECB.”

https://www.thisismoney.co.uk/money/markets/article-11022463/European-Central-Bank-plots-rate-hike-decade.html


Heatwave Fuels Europe’s Summer of Discontent…

“Amid a drawn-out war in Ukraine, with food and fuel prices rampant and recession fears on the rise, a period of sunshine will be enjoyed by many, especially in dank Britain. And yet the present heatwave may come to symbolize what’s shaping up to be a long, hot summer of discontent in Europe.”

https://www.bloomberg.com/news/newsletters/2022-07-18/heatwave-energy-crisis-fuel-europe-s-summer-of-discontent-balance-of-power


Hungary protests continue for fifth day amid growing anger at Orbán tax changes.

“Hungarians have taken to the streets since the parliament approved a law change on Tuesday that will affect hundreds of thousands of small business owners. The protests are the first since Orbán, the prime minister, won a consecutive fourth term by a landslide in April.”

https://www.theguardian.com/world/2022/jul/17/hungary-protests-continue-for-fifth-day-amid-growing-anger-at-orban-tax-changes


China braced for renewed lockdowns as Omicron subvariant spreads.

“China is at risk of more frequent lockdowns and mass testing as officials struggle to contain the spread of the highly transmissible BA.5 Omicron subvariant, experts said, despite the damage restrictions have already wrought on the world’s biggest consumer market.”

https://www.ft.com/content/d12159d4-8d94-44ae-92fe-d4ad0b731006


China Risks Hard Landing of Housing Sector, Ex-Official Warns…

In 2021 more than 90% of residential property sold were pre-sales, where people buy a house off the plans, according to data from the National Bureau of Statistics [Wow – Ponzi-esque!]. People can wait years for the apartment to be built and delivered and the recent boycotts were triggered by a rise in unfinished projects since the property slump began about a year ago.”

https://www.bloomberg.com/news/articles/2022-07-18/china-risks-hard-landing-of-housing-sector-ex-official-warns


China mortgage boycott data erased by censors as crisis spreads.

“China is censoring crowd-sourced documents tallying the number of mortgage boycotts spreading across the country, potentially hampering a key source of data for global investors and researchers tracking the property crisis.”

https://www.businesstimes.com.sg/real-estate/china-mortgage-boycott-data-erased-by-censors-as-crisis-spreads


Australia’s energy regulator has warned Victoria is facing a gas shortage which could plunge the electricity market into a fresh crisis.

“The Iona gas storage facility in Port Campbell has dropped to record-low supply levels due to high demand amid the state’s price cap… Reports suggest the AEMO may intervene to limit the amount of gas being taken from the facility.”

https://www.theguardian.com/australia-news/2022/jul/19/victoria-facing-gas-shortage-as-market-regulator-warns-of-further-intervention


Business confidence in central New Zealand has spiralled to a record low, with staffing shortages becoming the main barrier to business.

“The latest Central New Zealand Business Confidence Survey put expectations of the New Zealand economy at a net negative of -62 per cent.”

https://www.nzherald.co.nz/nz/business-confidence-spirals-to-record-low-damaging-staff-shortages/MUVHKRHV6OO2UVZNJTKKAWKKCI/


In Argentina’s trash cans, less waste reflects ravages of inflation…

“Rodríguez and half a dozen other cartoneros Reuters spoke to all painted the same picture of less trash being thrown away in recent months, squeezing their income and reflecting how fast-rising prices are causing shoppers to tighten their belts.”

https://www.reuters.com/world/americas/argentinas-trash-cans-less-waste-reflects-ravages-inflation-2022-07-18/


Fresh roadblocks as Panama protesters reject deal…

“”We are in a bad way; no food, no buses. I wanted to buy rice and… what little can be found is very expensive. The vegetables are damaged,” said Angelica Ruiz, a resident of Pacora east of Panama City who also had trouble getting to her place of work.”

https://www.france24.com/en/live-news/20220718-fresh-roadblocks-as-panama-protesters-reject-deal


Sasol outage means all South African oil refineries are now shut.

“Sasol, South Africa’s largest fuel producer, declared force majeure on the supply of petroleum products due to delays in deliveries of crude to the Natref refinery it owns with TotalEnergies SE, leaving just a fraction of the country’s fuel-production capacity still operational.”

https://www.moneyweb.co.za/news/companies-and-deals/sasol-outage-means-all-south-african-oil-refineries-are-now-shut/


The current countrywide power cuts [Zimbabwe] have triggered severe shortages of liquefied petroleum gas (LPG) in Bulawayo…

“Gas has become a source of energy for the majority, who are finding it difficult to afford electricity while those who are still yet to be electrified use the energy source for lighting and cooking.”

https://www.newzimbabwe.com/lpg-gas-shortage-hits-byo/


Nigerian unions to protest shutdown of public universities due to strike…

Workers in the oil and gas industry, have threatened to join the striking teachers, a situation that could worsen fuel shortages in the country… Nigeria faces mounting insecurity following a wave of kidnappings, high unemployment, inflation and low growth which could trigger unrest.”

https://www.reuters.com/world/africa/nigerian-unions-protest-shutdown-public-universities-due-strike-2022-07-17/


Oil dispute sharpens Baghdad-Kurd tensions amid deadlock…

“Baghdad has fought to regain control of output from lucrative oil fields in Kurdistan since the autonomous region began marketing oil independently more than a decade ago… In recent weeks, tensions have risen further after a series of unclaimed rocket attacks targeting oil and gas installations in Kurdistan.”

https://www.france24.com/en/live-news/20220718-oil-dispute-sharpens-baghdad-kurd-tensions-amid-deadlock


Saudi Arabia Reveals Oil Production Capacity Limits.

“Saudi Arabia, the world’s top crude oil exporter, will not have additional capacity to increase production above the 13 million barrels per day (bpd) it has pledged to have by 2027, Saudi Crown Prince Mohammed bin Salman told the leaders of the United States, the Gulf Cooperation Council (GCC) states, Jordan, Egypt, and Iraq at a summit this weekend.”

https://oilprice.com/Energy/Crude-Oil/Saudi-Arabia-Reveals-Oil-Production-Capacity-Limits.html


Uncertainty looms over the country’s fuel stock as the Bangladesh Petroleum Corporation is finding it difficult to import fuel amid a dollar shortage at local banks

“An emergency meeting will be held today at the PMO to review “the whole scenario of energy supply, power generation and distribution”.”

https://www.thedailystar.net/top-news/news/fuel-stocks-dwindling-3072766


Sri Lanka’s acting president declares emergency amid protests.

“Sri Lanka’s acting president on Monday declared a state of emergency that gives him broad authority amid growing protests demanding his resignation — just two days before the country’s lawmakers are set to elect a new president.”

https://www.cnbc.com/2022/07/18/sri-lankas-acting-president-declares-emergency-amid-protests.html


You can read the previous ‘Economic’ thread here. I’ll be back tomorrow with an ‘Climate’ thread.

If you found value in this content, please help me continue this work by becoming a patron of my work via Patreon. And if you are already a subscriber or have donated – thank you! It is a huge help, especially as the cost of living crisis is biting here in the UK.

16th July 2022 Today’s Round-Up of Economic News

We should be worrying about debt as well as inflation… total global debt today, relative to GDP, is more than double its 2006 level — and triple the 2000 ratio (when it was under 100 per cent).

“Yes, you read that right: leverage in the global economic system has risen more than three-fold this century; and the only reason that this went (mostly) unnoticed was sinking interest rates.

So what happens now if rates increase? No one knows.” [I have a pretty good idea and it’s not free ice cream for everyone.]

https://www.ft.com/content/98a1e4c3-1a4c-4fe1-b55e-56a669a54b81


Copper rout worsens as recession fears hammer commodities markets…

“The benchmark copper contract on the London Metal Exchange slipped 1.6 per cent lower to $6,987… Copper has dropped vertiginously since its price hit a record high above $10,600 a tonne in March… Now, the market’s gaze has flipped to fears that aggressive rate hikes by central banks, rising Covid cases in China and the prospect of Russia cutting off European gas…”

https://www.ft.com/content/63c35adc-ef87-44d9-a349-e8521715ee27


Lumber plays ‘canary in the coal mine’, cues downturn in commodities.

“The lumber market has taken some big hits from rising inflation and a slowdown in the housing market, with lumber prices down more than 40% in the first six months of the year. They could fall still further before bottoming out.”

https://www.marketwatch.com/amp/story/lumber-plays-canary-in-the-coal-mine-cues-downturn-in-commodities-11657821456


Oil Markets Torn Between Recession Fears And Physical Tightness.

“Oil market watchers have become senior macroeconomists lately, with price swings increasingly dependent on larger market sentiment… it seems that there is still no consensus on the main driving trend in the markets – fears of economic recession are just as strong as the feeling of immediate physical tightness.”

https://oilprice.com/Energy/Energy-General/Oil-Markets-Torn-Between-Recession-Fears-And-Physical-Tightness.html


Biden Likely To Leave Saudi Arabia With No Oil Supply News…

“Soaring oil prices and record national average gasoline prices of over $5 per gallon in the United States on some days in June, months before the midterm elections, have prompted President Biden to consider a visit to Saudi Arabia and a meeting with its rulers. Two years ago, he described Saudi Arabia as a “pariah” state…”

https://oilprice.com/Latest-Energy-News/World-News/Biden-Likely-To-Leave-Saudi-Arabia-With-No-Oil-Supply-News.html


U.S. manufacturing production falls for second straight month.

“Production at U.S. factories dropped for a second straight month in June as output of motor vehicles and a range of other goods declined, suggesting that higher interest rates were hurting the manufacturing sector.”

https://www.reuters.com/markets/us/us-manufacturing-production-falls-second-straight-month-2022-07-15/


[UK] Cost of living: ‘I’ve had to rummage in bins for food to eat’.

“Colin Walker is on his way home after being discharged from hospital but there’s one place he needs to visit first – his local food bank. The 60-year-old arrives at the Colchester branch with a nurse, who is taking him back to his flat after he had a stroke.”

https://www.bbc.co.uk/news/uk-england-essex-62150651


Investors bet on deepening euro sell-off as recession fears escalate…

““The question is not so much whether [a recession] is going to happen, it’s how bad it’s going to get,” said Antoine Bouvet, senior rates strategist at ING… Jordan Rochester, foreign exchange strategist at Japanese bank Nomura, took a similar view… “If that’s not an economic crisis, what is?” he said.”

https://www.ft.com/content/bfd4e67c-be72-4d43-96bb-5a05f700681c


Europe could face energy rationing as ‘really tough winter’ looms, Shell boss warns…

““It will be a really tough winter in Europe,” Ben van Beurden told the Aurora spring conference in Oxford on Thursday. “We will all face very significant escalation in energy prices. In the worst case, Europe will need to ration its energy consumption.””

https://www.theguardian.com/business/2022/jul/14/europe-could-face-energy-rationing-as-really-tough-winter-looms-shell-boss-warns


Russia’s gas shutoff is forcing Europe’s biggest buyer of its supplies to draw down winter emergency reserves…

“According to a Financial Times report, the Düsseldorf-based company, which is Europe’s biggest buyer of Russian gas, said that beginning earlier this week it’s been taking gas from storage units amid dwindling supplies.”

https://markets.businessinsider.com/news/commodities/russia-gas-germany-oil-energy-winter-emergency-reserves-war-ukraine-2022-7


Belgium asked Engie SA to extend the life of its Tihange 2 nuclear plant to ensure energy supplies and help offset rising prices this winter.

The French company though said there was a limit to how long the facility, in central eastern Belgium, could remain online… The extension of Tihange 2’s operation beyond the current legal shutdown date — Feb. 1 — isn’t feasible due to technical reasons and nuclear safety constraints, an Engie spokesperson said by phone.”

https://www.bloomberg.com/news/articles/2022-07-15/belgium-asks-engie-to-keep-nuclear-plant-open-amid-energy-crunch


Electricite de France SA’s nuclear-output cuts are expected to stretch into next week as a heat wave sweeping across Europe pushes up river temperatures, restricting EDF’s ability to cool its plants

The restrictions threaten to push power prices — already at eye-watering levels — even higher, with the effects rippling out to other European markets.”

https://www.bloomberg.com/news/articles/2022-07-15/french-nuclear-cuts-stretch-to-next-week-as-temperatures-soar


French president Emmanuel Macron has called on businesses, government agencies and households to do more to save energy…

“It is first time the French president has said the country faces a 1970s scenario of electricity and petrol shortages as a result of Russia’s invasion of Ukraine. Ministers had previously argued that France’s traditional strength in nuclear power meant it was less reliant on Russian gas imports than its neighbours…”

https://www.ft.com/content/7693f40e-9354-4106-8a3f-82c1ddcadabb


Greece’s tourism minister wants German retirees to spend winter in Greece instead of stressing out about the natural-gas crisis…

“”We invite every German who wants to come to us this winter to live here — away from the crises. Chania is the perfect place to survive a crisis winter: warm, friendly people and perhaps the best year-round climate in all of Europe,” said the city’s mayor, Panagiotis Simandirakis, per Bild.”

https://www.businessinsider.com/greece-invite-germany-spend-winter-heating-natural-gas-bills-crisis-2022-7


Italian debt market flashes warning as Draghi government teeters…

“The widening Italy-Germany spread — which hit 2.19 percentage points on Friday morning — highlights investors’ growing worries over politics in Rome at a time when the country also faces rising economic risks.”

https://www.ft.com/content/f01e3706-515c-4cb9-91e6-d53739767926


Like in many parts of the world, harvests underway in eastern Europe have suffered from a fertilizer crisis — and things could get worse.

“That’s according to Hungarian producer Nitrogenmuvek Zrt, which sees grain yields falling 15% to 20% this year in a region that includes major European exporters Romania and Poland. Farmers have cut nutrient usage due to high prices and supply issue.”

https://www.bloomberg.com/news/articles/2022-07-14/fertilizer-crisis-shrinking-crops-in-eastern-europe-could-worsen#xj4y7vzkg


A wave of agricultural protest has swept Europe and the wider world, as a host of issues conspire to pit farmers against national politics.

“Farmer-led protests in Germany, Italy, Spain and Poland have sprung up in the wake of action by Dutch farmers, who were first to take to the streets to complain about the impact of new emissions rules.”

https://www.thescottishfarmer.co.uk/news/20278342.farmer-protests-spread-across-globe/


China’s economic growth slumps sharply after Covid lockdowns… Shutdown of cities takes its toll, while property market remains in crisis and global outlook darkens…

“Output contracted by 2.6% between April and June compared with the previous quarter… The consultancy Capital Economics said the real figure was probably “even weaker than meets the eye” and suggested that the Chinese government…. could be trying to disguise the economy’s sluggishness.”

https://www.theguardian.com/business/2022/jul/15/chinas-quarterly-economic-growth-slumps-sharply-after-covid-lockdowns


30% of China’s local governments may face severe debt strain: S&P.

” Almost a third of local and regional governments in China could be in dire enough financial straits at the end of this year to require corrective action such as cutting spending, as growing interest burdens and shrinking income from land sales continue to batter budgets.”

https://asia.nikkei.com/Business/Markets/China-debt-crunch/30-of-China-s-local-governments-may-face-severe-debt-strain-S-P


China Home Prices Fall for 10th Month as Property Crisis Deepens…

“China’s $2.4 trillion real estate market is showing little signs of recovery. Contagion is spreading to the financial system amid reports that a rapidly growing number of homebuyers are refusing to pay mortgages for incomplete apartments. That’s alarmed investors…”

https://www.bloomberg.com/news/articles/2022-07-15/china-home-prices-fall-for-10th-month-as-property-crisis-deepens


China in crisis meeting with banks on mortgage boycotts…

“While there was no immediate solution, regulators asked local watchdogs and banks to report the impact, including property projects affected in their jurisdictions, as soon as possible, the people said. Some banks plan to tighten their mortgage lending requirements in high-risk cities…”

https://www.afr.com/property/residential/china-in-crisis-meeting-with-banks-on-mortgage-boycotts-20220714-p5b1px


Argentines Brace for 90% Inflation After Economy Minister’s Exit.

“Argentines face the prospect of 90% inflation by year end…

“That would be the fastest pace since hyperinflation three decades ago, and the highest rate in the world outside Venezuela and Sudan, according to forecasts from the International Monetary Fund.”

https://www.bloomberg.com/news/articles/2022-07-14/argentines-brace-for-90-inflation-after-economy-minister-s-exit


Highway blocked as Panama protests persist…

“As protesters ignored government calls for negotiations to end the angry mobilization, dozens of blockades were maintained on the critical highway that connects the country of 4.4 million people to the rest of Central America.”

https://www.france24.com/en/live-news/20220715-highway-blocked-as-panama-protests-persist


Cubans Queue Up For Days To Get Diesel Fuel…

“According to experts, the dramatic shortage of diesel fuel is the result of a “domino effect”, as authorities were forced to divert fuel from the transport sector to run power plants. Dany Pérez has spent four days in a queue of cars waiting to refuel his truck with diesel…”

https://www.republicworld.com/world-news/rest-of-the-world-news/cubans-queue-up-in-for-days-to-get-diesel-fuel-articleshow.html


Cameroon’s Drivers Protest as Fuel Shortage Spreads…

“More than 100 drivers pack a filling station in the Etoudi neighborhood of Cameroon’s capital, Yaoundé, Friday, honking their horns to protest a fresh fuel shortage. The drivers say their incomes have nosedived since Yaoundé ran short of fuel this month and the scarcity spread to other towns.”

https://www.voanews.com/a/cameroon-s-drivers-protest-as-fuel-shortage-spreads/6660175.html


Protest Fears Freeze Mozambique Capital as Cost of Living Bites.

“Mozambican schools closed and office workers mostly stayed at home in the capital of Maputo as fears grew that cost-of-living protests could turn violent. The city was largely deserted and law enforcement on high alert…”

https://www.bloomberg.com/news/articles/2022-07-14/protest-fears-freeze-mozambican-capital-as-cost-of-living-bites


Looming diesel crisis fuels fears in Uganda…

““At the current prices of diesel, you need seven litres to till an acre of land,” Mr Aluka says, adding, “That means going back to our oxen ploughing, which is cheaper,” he said… Diesel is indispensable to Uganda’s economy not least because it powers generators that provide critical electrical power…”

https://www.monitor.co.ug/uganda/news/national/looming-diesel-crisis-fuels-fears-in-uganda-3881628


Beirut port fire revives trauma ahead of blast anniversary…

“The fire has been burning slowly in the ruins of the port’s grain silos, giving off an orange glow visible at night from neighbourhoods that were most badly damaged by the Aug. 4, 2020 chemical explosion that killed more than 215 people. The authorities say it is the result of summer heat igniting fermenting grain…”

https://www.euronews.com/2022/07/15/us-lebanon-crisis-port-fire


Mass gathering in Iraq a potential sign of a summer of protests…

““Our demands in the upcoming protests will include all the rights that will preserve the dignity of Iraqis, such as improving services and providing job opportunities, drinking water, and the major calls for new elections and take down the corrupt parties in power,” Fayyad said.”

https://www.aljazeera.com/news/2022/7/15/mass-gathering-in-iraq-a-potential-sign-of-a-summer-of-protests


Sri Lanka’s president quits after fleeing protests in crisis-hit country…

“Rajapaksa’s office said his resignation letter had been received by the country’s parliamentary speaker, after it was flown from Singapore, to where the leader had fled via the Maldives… News of Rajapaksa’s resignation was greeted by cheers and the lighting of firecrackers in the streets of Colombo.”

https://www.theguardian.com/world/2022/jul/14/sri-lanka-president-gotabaya-rajapaksa-quits-protests


The big default? The dozen countries in the danger zone.

“Lebanon, Sri Lanka, Russia, Suriname and Zambia are already in default, Belarus is on the brink and at least another dozen are in the danger zone as rising borrowing costs, inflation and debt all stoke fears of economic collapse. Totting up the cost is eyewatering.”

https://financialpost.com/pmn/business-pmn/the-big-default-the-dozen-countries-in-the-danger-zone


Global heat waves are so bad that utilities are paying their customers to use less energy…

“The surging temperatures are causing spikes in energy demand, straining electrical grids to the limit as residents crank up the AC. And so, in order to prevent unexpected blackouts this surge could cause, utility operators across the world are turning to a desperate measure: paying their industrial customers compensation to shut down operations and go home.”

https://fortune.com/2022/07/15/demand-response-agreements-heat-waves-utilities-pay-customers-to-use-less-energy/


You can read the previous ‘Economic’ thread here. I’ll be back on Monday with a ‘Climate’ thread.

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14th July 2022 Today’s Round-Up of Economic News

Today’s energy crisis will probably become worse than the 1970s oil shock… Five factors could create higher prices and political instability across the world…

In the 1970s, only oil was involved, whereas this crisis encompasses natural gas, coal, and even the nuclear-fuel cycle. In addition to stoking inflation, today’s crisis is transforming a previously global market into one that is fragmented and more vulnerable to disruption, crimping economic growth. And, together with the geopolitical crisis arising from the war in Ukraine, it is further deepening the world’s great-power rivalries.

https://www.marketwatch.com/story/todays-energy-crisis-will-probably-become-worse-than-the-1970s-oil-shock-11657652970


Gasoline surge pushes up costs for chemicals used in essential goods.

“A surge in gasoline prices has caused a shortage of chemicals that are also used to produce goods like car parts and pharmaceutical products, placing further pressure on costs for manufacturing essential items.”

https://www.ft.com/content/3f2297ee-6130-4c73-90c7-67645985b7e3


Soaring fuel prices hit oil demand in developed countries, IEA says.

“Record fuel prices are hitting oil demand in developed countries harder than anticipated, the International Energy Agency warned on Wednesday, in the latest sign of inflationary pressures forcing consumers to cut back.”

https://www.ft.com/content/62da7352-298f-4ecf-b963-7ef36b9aa604


IMF Chief Warns of Debt Crisis as Higher Rates Follow Covid, War…

“Nations that don’t earn the US currency but have to service debt in the greenback are finding it “twice as hard” to keep up, Georgieva said, adding that about 30% of developing and emerging-market nations are either in or near debt distress.”

https://www.bloomberg.com/news/articles/2022-07-12/imf-chief-warns-of-debt-crisis-as-higher-rates-follow-covid-war


Global recession risk rising as economic outlook ‘darkens significantly’, IMF says…

“It is going to be a tough 2022 – and possibly an even tougher 2023, with increased risk of recession.” The IMF would be downgrading its growth forecasts for global growth for both 2022 and 2023 later this month, she said, having warned in April that its forecast of 3.6% was likely to be revised downwards.”

https://www.theguardian.com/business/2022/jul/14/global-recession-risk-rising-as-economic-outlook-darkens-significantly-imf-says


Soaring gas and food prices catapult US inflation to 40-year-high.

“US inflation accelerated in June by more than forecast, led by elevated prices for gasoline, food and housing costs and resulting in the largest annual increase in inflation in more than 40 years. The news virtually guarantees that the Federal Reserve will hike interest rates by another three-quarters of a point this month.”

https://www.theguardian.com/business/2022/jul/13/high-us-gas-food-prices-june-led-to-largest-annual-increase-inflation-40-years


Truckers Protest California Gig-Work Law at Three Key Ports.

“Truckers servicing some of the US’s busiest ports are staging protests Wednesday as state-level labor rules that change their employment status begin to go into effect, creating another choke point in stressed US supply chains.”

https://news.bloomberglaw.com/daily-labor-report/truckers-protest-california-gig-work-law-at-three-key-ports


Euro dips below parity against dollar for first time since 2002…

““Gas rationing, stagflation, an expected recession, they are all good reasons to be bearish on the euro,” said Stuart Cole, the head macro economist at Equiti Capital in London, before the euro crossed that threshold.”

https://www.theguardian.com/world/2022/jul/13/euro-dips-below-parity-against-dollar-for-first-time-since-2002


Russian energy company Gazprom appeared to cast doubt Wednesday on the prospects of quickly restoring the flow of natural gas to full capacity through a major pipeline to Western Europe

“Gazprom tweeted Wednesday that it “does not possess any documents that would enable Siemens to get the gas turbine engine … out of Canada.””

https://abcnews.go.com/International/wireStory/gazprom-casts-doubt-pipelines-quick-return-full-flow-86745491


Germany Will Stop Buying Russian Coal On August 1, Oil On December 31…

“Russia previously supplied 40 percent of Germany’s coal and 40 percent of its oil, Deputy Finance Minister Joerg Kukies on July 13 told the Sydney Energy Forum, hosted by the Australian government and the International Energy Agency.”

https://www.rferl.org/a/germany-to-stop-buying-russian-coal-on-august-1/31941018.html


Germans could switch to wood this winter to heat their homes as Russia withholds natural gas, Deutsche Bank says…

Deutsche Bank’s assertion that households could turn to wood for heat isn’t without merit. Amid a power outage last winter, Texas households resorted to burning wood and furniture for heat. [Way to sell the concept, DB!] The switch, Deutsche Bank says, would further drive down gas demand in Germany.”

https://markets.businessinsider.com/news/commodities/russian-gas-heat-germany-ukraine-energy-nord-stream-deustche-bank-2022-7


German investor sentiment collapsed in July, as fears that Germany could be plunged into recession continue to grow.

“With Germany facing huge energy supply issues, as well as interest rate rises from the European Central Bank, the ZEW economic research institute reports that its economic sentiment index has dropped below levels seen during the initial stages of the Covid pandemic.”

https://reaction.life/german-investor-confidence-crashes-below-covid-levels/


Sudden tax reform sparks protests in Hungary.

“Thousands participated in demonstrations in response to the changes in Budapest on Tuesday, where protestors successfully occupied one of the main bridges in the capital for several hours before being pushed out by the police. Protests were also held in the cities of Debrecen and Szeged.”

https://www.euractiv.com/section/politics/short_news/sudden-tax-reform-sparks-protests-in-hungary/


Hungary declares ‘energy emergency’ over threat of fuel shortages…

“Hungary will boost its annual production of natural gas… increase the extraction of lignite (brown coal) and put a currently non-functioning lignite-fired power plant back online… Energy exports will be banned, and Hungary’s only nuclear power plant will also increase its production by extending its operating times…”

https://www.aljazeera.com/news/2022/7/13/hungary-declares-energy-emergency-over-threat-of-fuel-shortages


Can France ensure its energy security this winter?

“…Major cities in France will almost certainly face power cuts this year and the next, one source working in corporate risk management told EURACTIV, speaking on the condition of anonymity. They added that all European governments “are preparing for blackouts” and “energy executives and political leaders are hoping the winter will not be too cold.”

https://www.euractiv.com/section/energy/news/can-france-ensure-its-energy-security-this-winter/


A disaster prevention expert suggests people in Japan prepare rechargeable batteries, frozen gel packs and ice in case of blackouts during a severe heat wave.

“An energy conservation drive for businesses and households began on July 1 after a request by the Japanese government to avoid electricity shortfalls this summer.”

https://mainichi.jp/english/articles/20220713/p2a/00m/0na/019000c


China’s Heatwave Turns Deadly as Industrial Power Cuts Begin.

“Scorching temperatures across China have turned deadly, with hospitals reporting patients dying of heat stroke, as officials begin curtailing power to factories to ensure sufficient supply for air-conditioners… China is not alone in facing extreme weather this summer, as climate change pushes the boundaries of what forecasters are used to planning for.”

https://www.bloomberg.com/news/articles/2022-07-14/china-s-heatwave-turns-deadly-as-industrial-power-cuts-begin


China’s Henan bank scandal not just a financial crisis, it may be a lasting political calamity: analysts.

“The Henan bank scandal, in which 40 billion yuan (US$6 billion) in deposits disappeared, is more than a Chinese banking crisis – it is a political crisis that could undermine people’s confidence in local governance and also other local banks, according to analysts.”

https://www.scmp.com/news/china/politics/article/3185182/chinas-henan-bank-scandal-not-just-financial-crisis-it-may-be


More Chinese Homebuyers Refuse to Pay Mortgage Loans Amid Contagion Fears.

“A rapidly increasing number of disgruntled Chinese homebuyers are refusing to pay mortgages for unfinished construction projects, exacerbating the country’s real estate woes and stoking fears that the crisis will spread to the wider financial system.”

https://www.bloomberg.com/news/articles/2022-07-14/more-chinese-homebuyers-refuse-to-pay-loans-amid-contagion-fears#xj4y7vzkg


Argentine farm groups strike to protest government policies.

“Argentina’s four main farm associations halted their activities on Wednesday in protest over the policies of President Alberto Fernandez’s administration. The strike comes amid a challenging economic climate marked by fuel shortages in some regions and difficulties in importing fertilizer.”

https://www.laprensalatina.com/argentine-farm-groups-strike-to-protest-government-policies/


Panama protests continue despite fuel and food price cuts.

“Thousands of Panamanians took to the street again on Tuesday to protest rising inflation and government corruption, despite the announcement of price cuts for fuel and some food products. The demonstrations… have lasted for two weeks and resulted in some main highways being closed.”

https://www.france24.com/en/live-news/20220713-panama-protests-continue-despite-fuel-and-food-price-cuts


Famine feared if inflation in Mexico is not controlled, economist says.

“One of Mexico’s most renowned economists is predicting Mexico will reach a 10 percent inflation rate by the end of the year, which would be “disastrous and could lead to famine in some parts of the country.” …Carstens warns prices for basic foods are spiraling upward by more than 13 percent…”

https://www.krqe.com/news/top-stories/famine-feared-if-inflation-in-mexico-is-not-controlled-economist-says/


Week of gang battles kills dozens, deepens fuel crisis in Haiti.

“A week of gang violence in Haiti’s capital has left at least 89 people dead, a rights group said Wednesday, as soaring prices, fuel shortages and gang warfare accelerate a brutal downward spiral in the security situation in Port-au-Prince… Gas stations in Port-au-Prince don’t have any gas to sell, causing prices on the black market to skyrocket.”

https://www.france24.com/en/americas/20220714-week-of-gang-battles-kills-dozens-deepens-fuel-shortages-in-haiti


Nigeria Needs Higher Revenue to Avert Debt Distress, DMO Says.

“Nigeria’s debt management office defended the government’s eurobond issuances to fund its spending plans but said the nation needs to generate significantly more revenue beyond current levels to avoid debt distress.”

https://www.bloomberg.com/news/articles/2022-07-13/nigeria-needs-higher-revenue-to-avert-debt-distress-dmo-says


Ghana inflation scales new peak as it seeks IMF bailout.

“Consumer inflation in Ghana accelerated to 29.8 percent annually in June from 27.6 percent in May, official data showed on Wednesday, shattering another record while the West African nation talks to the International Monetary Fund (IMF) for support.”

https://www.aljazeera.com/news/2022/7/13/ghana-inflation-scales-new-peak-at-29-8-in-june


Cameroon Orders Investment in Wheat Production to Quell Protests Sparked by Shortages.

“Cameroon’s agriculture minister, Gabriel Mbairobe, says Biya responded to pleas from civilians that the cost of living is becoming very high, and many Cameroonians are finding it very difficult to put food on the table.”

https://www.voanews.com/a/cameroon-orders-investment-in-wheat-production-to-quell-protests-sparked-by-shortage-after-russia-s-invasion-of-ukraine-/6655404.html


Sub-Saharan Africa Facing Severe Food Shortage…

““As we look at 2023, we know that this will repeat itself. These climate shocks will repeat themselves; food insecurity will remain as acute as it is,” said Patrick Youssef. “It will not end with the calendar year. So, we all will better collectively be prepared for a long haul, for a situation, for a crisis that will certainly increase in size and volume.””

https://www.voanews.com/a/sub-saharan-africa-facing-severe-food-shortage/6655559.html


Libyans at boiling point amid summer power cuts…

“The people of Libya are enduring electricity cuts of up to 18 hours a day, despite their country sitting atop Africa’s largest proven oil reserves. After a decade of violence, rising poverty and fragmenting government, many have reached the limits of their tolerance.”

https://www.france24.com/en/live-news/20220714-libyans-at-boiling-point-amid-summer-power-cuts


Sri Lanka crisis: Six-mile daily walk for food as demand for free meals soars and people struggle to survive…

“The food crisis is so acute that the United Nations estimates 70% of people are missing a meal every day and one in five are hungry. It’s a shocking economic collapse for a country once regarded as a middle-income nation, with a strong agricultural sector and burgeoning tourist industry.

https://news.sky.com/story/sri-lanka-crisis-six-mile-daily-walk-for-food-as-demand-for-free-meals-soars-and-people-struggle-to-survive-12650832


Sri Lanka’s Bailout Slips Further Away as Nation Misses a Leader…

““The IMF will need a constitutionally mandated government to negotiate with,” said Matthew Vogel, London-based portfolio manager and head of sovereign research at FIM Partners. “The role of the central bank governor now is key and the international community, facing a humanitarian crisis, will have to consider additional emergency aid.””

https://www.bloomberg.com/news/articles/2022-07-12/sri-lanka-s-bailout-slips-further-away-as-nation-misses-a-leader


Sri Lanka’s economic collapse ringing ‘alarm bells’ for emerging markets: Expert…

““We know the lesson of recent history is that one crisis leads to another. We think of the global financial crisis, then the Eurozone crisis. Then look at the Arab Spring and political unrest. These things are connected, and so we can’t just disassociate. The economic and political repercussions are deeply intertwined,” Lipsky explained.”

https://uk.finance.yahoo.com/news/emerging-markets-sri-lanka-economy-oecd-world-bank-imf-colombo-inflation-commodity-oil-food-192708488.html


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

If you found value in this content, please help me continue this work by becoming a patron of my work via Patreon. And if you are already a subscriber or have donated – thank you! It is a huge help, especially as the cost of living crisis is biting here in the UK.