Baltic Dry Index. 1138 +60 Brent Crude 76.68
Spot Gold 1929 US 2 Year Yield 4.68 unch.
There can be few fields of human endeavour in which history
counts for so little as in the world of finance. Past experience, to the extent
that it is part of memory at all, is dismissed as the primitive refuge of those
who do not have the insight to appreciate the incredible wonders of the
present.
John Kenneth Galbraith.
In the stock casinos, Fed Chairman Powell promised a pin to burst the latest stock casino bubble. But would he dare do that ahead of next year’s US presidential election?
In Asia, more wobble, but with China closed for a holiday, tomorrow will be more of a key day in Asia than today.
In Europe, will the UK’s BoE raise their key interest rate today by 25 or 50 basis points. Yesterday’s disappointing May inflation rate really requires a 50 basis point hike, but will the BoE dare do that adding yet more downward pressure on a distressed property market?
With a fast looming global recession ahead, I still think that after today’s BoE interest rate hike, most interest rate hikes will be over, recessions always generate falling interest rates eventually.
Besides, US, UK and EU rates are now high enough to pull money out of stocks and into government bonds ahead of any global recession taking hold.
Raising US interest rates from here will have
no effect on food price inflation, that now depends on what happens next with northern
hemisphere crops and will have very little effect on the USA worker
shortage.
Asia stocks subdued
after Powell testimony fails to surprise
June
22, 20233:51 AM GMT+1
SINGAPORE, June 22 (Reuters) - Asian
shares made a tentative start to Thursday after Federal Reserve chair Jerome
Powell stuck to his recent hawkish tone as investors assess the future rate
policy path from the Fed.
MSCI's broadest
index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) was marginally lower
at 522.93. The index is down over 2% for the week and set to snap its three
week winning run.
Australia's
S&P/ASX 200 index (.AXJO) lost 1.17%, while Japan's
Nikkei (.N225) eased 0.25%. China and Hong
Kong stock markets are closed for a holiday.
Last week, the Fed held its benchmark
interest rate steady at level between 5% and 5.25%, but officials projected
rates will have to increase another half percentage point by year's end to tame
inflation.
Markets though
remain unconvinced, pricing in a 25 basis point hike next month, according to
CME FedWatch tool, and no more after that.
Powell in his remarks to lawmakers in Washington
said the outlook for two further 25 basis point rate increases are "a
pretty good guess" of where the central bank is heading if the economy
continues in its current direction.
While his remarks
were eagerly awaited by investors, they offered no real surprise.
----Atlanta Federal Reserve President
Raphael Bostic said on Wednesday the Fed should not
raise rates further or it would risk "needlessly" sapping the
strength of the U.S. economy.
The comments
highlight the growing debate at the central bank over when and if the central
bank should hike further.
Investor attention
will be on Bank of England later in the day, with
a hike widely expected and the only contention is how big the raise will be
after inflation data came in hotter than expected on Wednesday.
Economists polled
by Reuters last week were unanimous that the BoE would raise rates to 4.75%,
their highest since 2008, from 4.5% but the inflation data pushed financial
markets to price in a nearly 50% chance that the BoE would opt for a bigger
move and raise rates by half a percentage point.
"Where other central banks'
concern is now slower-than-hoped easing, the UK is still seeing
acceleration," said Taylor Nugent, an economist at National Australia
Bank, referring to runaway UK inflation, which held at 8.7% in May.
"The BoE's
conditional guidance put the burden of proof on the data showing more
persistent inflation pressures to continue hiking bank rate. Combined with
wages data last week, they have got that in spades."
More
Asia
stocks subdued after Powell testimony fails to surprise | Reuters
European markets head for negative open after
Fed’s Powell comments; BoE rate decision ahead
UPDATED THU, JUN 22 2023 12:17 AM EDT
European markets are heading for a negative open on Thursday, with sentiment
subdued after U.S. Federal Reserve Chairman Jerome Powell forecast more rate
hikes this year, saying that “the process of getting back down to 2% has a long
way to go.”
“Nearly all FOMC participants expect that it will be
appropriate to raise interest rates somewhat further by the end of the year,” Powell said in remarks prepared for
testimony before the House Financial Services Committee Wednesday.
Investors in the U.K. are focused on the Bank of England’s
next monetary policy announcement. The central bank is expected to increase
rates as
inflation remains stubbornly high.
Other data releases of note today include preliminary
consumer confidence numbers for the EU in June.
European markets live updates: BoE decision, consumer confidence (cnbc.com)
In other news, more drag on the global economy.
Drought-hit Panama
Canal further restricts maximum ship depth
June
22, 2023 4:19 AM GMT+1U
PANAMA CITY, June 21 (Reuters) - The
Panama Canal will expand restrictions on the largest ships crossing the
waterway, one of the world's busiest trade passages, the canal authority's
administrator said on Wednesday, citing shallower waters due to drought.
The measure follows
a series of depth restrictions in the 50-mile (80 km) canal since the beginning
of the year due to a drought, which authorities had hoped would ease by the
start of the Central American country's rainy season.
Ship traffic, including container ships
and oil tankers, using the canal between the Atlantic Ocean and Pacific Ocean
accounts for about 3.5% of global trade.
The new
restrictions, which will take effect Sunday, limit neo-Panamax container ships
to a depth limit of 43.5 feet (13.3 metres) meaning they must either carry less
cargo or shed weight in order to float higher.
The previous maximum
draft was 44.0 feet.
Panamax ships, which
use the canal's older locks, will also face tighter rules on July 9, the port
administration told clients in an advisory seen by Reuters.
Both classes will
see a further limit applied on July 19.
Port administrator
Ricaurte Vasquez said the July 19 measure will depend on how much rain pours
into the lake system surrounding the canal, calling the current lack of
rainfall "worrisome" as the canal basin must also provide additional
drinking water for residents.
More
Drought-hit
Panama Canal further restricts maximum ship depth | Reuters
Finally, more on so you really, really,
really want an Electric Vehicle.
Fire
officials point to lithium-ion batteries in NYC e-bike shop fire that killed 4
JUNE 20, 2023 / 4:40 PM
June 20 (UPI) -- Four
people died in a fire at a e-bike repair shop in lower Manhattan Tuesday. Two
people are reportedly in critical condition.
The fire broke out at around 12:15 a.m. at 80 Madison St. and
set the shop, which was in a six-story building that is also home to
residential units, on fire.
"It's very clear that this was caused by lithium-ion
batteries e-bikes," said Fire Commissioner Laura Kavanaugh told a press
conference Tuesday.
According to police, six people were taken to local
hospitals, where four of them died. The other two are in critical condition.
New York City Chief Fire Marshall Daniel Flynn said the
shop previously had received citations for improper storage and had been fined
$1,600.
City officials have warned previously of fire risks associated with e-bikes, with
at least 140 fires caused by the vehicles last year. At least six people were
killed, including two young girls, and 140 injured in those fires, according to
city officials.
Last year the FDNY posted a video to Instagram in which Flynn urged city residents to
safety recharge and store their e-bike lithium batteries.
---- In March, New York City banned the sale
of e-bikes that don't meet specific safety standards as well as the
refurbishment of lithium-ion batteries. That same months, Mayor Eric Adams said
he intended to create a fire marshal task force to address the issue.
Fire officials point to lithium-ion batteries in NYC e-bike shop fire that killed 4 - UPI.com
Global Inflation/Stagflation/Recession Watch.
Given
our Magic Money Tree central banksters and our spendthrift politicians,
inflation now needs an entire section of its own.
UK's stubborn
inflation fails to fall as forecast in May
June 21, 20237:30 AM GMT+1
LONDON, June 21 (Reuters) - British
consumer price inflation defied expectations that it would slow and held at
8.7% in May, official figures showed on Wednesday, a day before the Bank of
England is forecast to raise interest rates for the 13th time in a row.
Economists polled by Reuters had
forecast that the annual CPI rate would drop to 8.4% in May, moving further
away from October's 41-year high of 11.1%.
"We will not hesitate in our
resolve to support the Bank of England as it seeks to squeeze inflation out of
our economy, while also providing targeted support with the cost of
living," finance minister Jeremy Hunt said.
---- The ONS said core inflation - a
measure which excludes volatile food, energy, alcohol and tobacco prices, and
which the BoE views as a good guide to underlying price pressures -
unexpectedly rose to 7.1% from 6.8%, its highest since 1992.
"The cost of airfares rose by more
than a year ago and is at a higher level than usual for May," Office for
National Statistics chief economist Grant Fitzner said.
"Rising prices for second-hand
cars, live music events and computer games also contributed to inflation
remaining high."
British inflation has proved more
persistent than in other major advanced economies, with headline CPI the highest
in the G7, ahead of Italy which recorded a rate of 8.0% in May.
The
BoE is widely expected to raise interest rates on Thursday to 4.75% from 4.5%.
Before Wednesday's data, markets had ramped up their expectations for the peak
in BoE rates to as high as 6% by early 2024.
UK's stubborn
inflation fails to fall as forecast in May | Reuters
Bank may need to spark
recession to control inflation, economist says
June
21, 2023
The Bank of
England might need to spark a recession to finally get price rises under
control, an economist who advises the Chancellor has warned as inflation proved
more persistent than expected.
JP Morgan’s
Karen Ward said that without weakness in the economy, inflation might stick
around for much longer.
She said there
are “certainly signs” in the economy of a so-called price-wage spiral, where
companies hike prices and as a result workers demand pay rises, which leads to
companies hiking prices again.
Speaking to
BBC Radio 4’s Today programme, Ms Ward, who sits on the Chancellor’s economy
advisory council, said the Bank of England has to interrupt this spiral.
“The
difficulty for the Bank of England – I mean, no-one envies them their job at
the moment – is they have to therefore create a recession,” she said.
“They have to
create uncertainty and frailty, because it’s only when companies feel nervous
about the future that they will think ‘Well, maybe I won’t put through that
price rise’, or workers, when they’re a little bit less confident about their
job, think ‘Oh, I won’t push my boss for that higher pay’.
“It’s that
weakness in activity which eventually gets rid of inflation.”
On Wednesday,
the Office for National Statistics said inflation had remained at 8.7% in May,
unchanged from the month before and much higher than the 8.4% experts had
forecast.
More
Bank may need to
spark recession to control inflation, economist says (msn.com)
ECB Interest Rates
The European Central Bank has completed most of
its interest rate increases,
and possible further hikes would be less important in fighting inflation than
the duration of tight monetary policy, Bank of France Governor Francois
Villeroy de Galhau said. “We have done most of the path,” Villeroy said in an
interview with French newspaper Les Echos. “Our rates are now tending toward
their asymptote, and any additional increases will depend on the inflation data
observed — everything in its own time, and every decision in its time.”
The policymaker’s comments add caution to a
heated debate at the ECB over the outlook for interest rates, with more hawkish
colleagues warning increases may still be needed in the fall.
Stock Markets Today:
Submersible Rescue, Pirelli China, ECB Interest Rates - Bloomberg
Your Evening Briefing: Powell Says
Higher Interest Rates Still Needed
21 June 2023 at 22:56 BST
Federal Reserve Chair Jerome Powell said policymakers
expect interest rates will need to move
higher to reduce US growth to below its long-term trend and
contain price pressures. When that happens, however, will depend on the data.
“My colleagues and I understand the hardship that high inflation is causing,
and we remain strongly committed to bringing inflation back down to our 2%
goal,” Powell said in remarks prepared for the House Financial Services
Committee. “We will continue to make our decisions meeting-by-meeting, based on
the totality of incoming data and their implications for the outlook for
economic activity and inflation, as well as the balance of risks.”
The Federal Open Market Committee paused its series of
interest-rate hikes last week for the first time in 15 months, leaving rates in
a range of 5% to 5.25%. But Fed officials estimated rates would rise to 5.6% by
the end of the year, according to their median projection, implying two
additional quarter-point hikes to wrestle with
slowing-but-sticky inflation and a strong US labor-market.
Here are today’s top stories
US stocks slid after
Powell’s renewed warning, thwarting bets that the US central bank was nearing
the end of its tightening cycle. Here’s your markets
wrap.
More
Bloomberg Evening Briefing: Powell Says Higher Interest Rates Are Still Needed - Bloomberg
Covid-19 Corner
This
section will continue until it becomes unneeded.
Omicron’s New Variant Arcturus
Rapidly Spreading Worldwide Causes Pink Eye
Jun 20 2023
A new COVID-19 variant, Omicron XBB. 1.16, also called Arcturus, was first discovered in January 2023.
One of the characteristics of Arcturus infection is conjunctivitis, otherwise known as pink eye. It is spreading rapidly in many countries, including the United States, the UK, Australia, Singapore, China, and India.
American virology expert Dr. Lin Xiaoxu discussed on the program “Health 1+1″ that emerging new COVID-19 variants were inevitable. He said although it would be hard to forecast the trend of a virus and pathogenicity, the public should be concerned but does not need to panic.
----As of April 2023, the XBB.1.5 strain, a descendant of the Omicron XBB strain, has proliferated worldwide, and the new variant XBB. 1.16 (Arcturus) has been widespread in various countries.
Lin stated Arcturus was 36 times more contagious than B.1.1.
In laboratory studies, Arcturus had an additional mutation in the spike protein, which was more contagious.
Global Risks of Arcturus
On May 3, 2023, Lancet Infectious Diseases published a study conducted at the Institute of Medical Sciences at the University of Tokyo in Japan.
The study found that XBB.1.16
demonstrates a greater growth advantage in the human population than XBB.1 and
XBB.1.5. However, similar to XBB.1 and XBB.1.5, XBB.1.16 exhibits significant
immune evasion capabilities.
Japanese medical researchers also
discovered that Arcturus had potent resistance to various new COVID-19
antibodies.
On April 20, the Central Epidemic
Command Center of the National Health Command Center, Taiwan, held a news
conference on the latest mutation.
Lo Yi-chun, a center spokesperson, said the analysis of global variants revealed that the mainstream virus strain was still the XBB strain, accounting for 77 percent of all COVID-19 variants.
Among these variants, XBB. 1.5 variants accounted for 47.9 percent.
Arcturus rose from 1 to 4 percent, with an increasing trend in the United
States.
The variant was still under observation as of May 21, 2023.
More
Omicron’s New Variant Arcturus Rapidly Spreading Worldwide Causes Pink Eye (theepochtimes.com)
Johns Hopkins Coronavirus
resource centre
https://coronavirus.jhu.edu/map.html
Centers for Disease Control
Coronavirus
https://www.cdc.gov/coronavirus/2019-ncov/index.html
The
Spectator Covid-19
data tracker (UK)
https://data.spectator.co.uk/city/national
Technology
Update.
With events happening fast in the
development of solar power and graphene, among other things, I’ve added this
section. Updates as they get reported.
Well it is the silly season. Coming
soon near you, the crash landing.
Suzuki to make 'flying cars' with SkyDrive
June 20, 2023 08:50 AM
Suzuki to make
eVTOL aircraft with SkyDrive in Japan | Automotive News Europe (autonews.com)
If all else fails, immortality
can always be assured by spectacular error.
John Kenneth
Galbraith.
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