Global Macro

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US and China on recession collision course

Hard to believe, I know. It was only a few months ago that we were all celebrating the boom of a lifetime but that’s how fast things can turn in the COVID environment. The Fed’s GDPNow measure is almost in contraction now: As we know, China is already at 0.2% as well: Some of the

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2022 deflation shock takes shape

BTC cheerleader Jack Dorsey called the top for inflation earlier this week: Hyperinflation is going to change everything. It’s happening. — jack⚡️ (@jack) October 23, 2021 That’s ridiculous. 2022 is going to bring a deflation shock the likes of which the world has not seen since 2015.  Goldman: With used car prices rising sharply again

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Goods to services hand-off begins

Nordea with a snippet: One likely underappreciated driver of so-called supply chain issues stem from demand-side issues. The initial shock from the pandemic depressed demand both for goods and services. However, already by June 2020 US goods consumption had surged way above trend. If you can’t consume services as you’re locked into your apartment –

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Weekly COVID-19 (Coronavirus) statistics and analysis flipbook

See our Coronavirus data Dashboard for individual country data. COVID-19 statistics and cases around the World   Europe   Americas       Asia   Australia High Vaccination Nations     More COVID-19 Statistics and Analysis See our latest blog posts or podcasts here. See our Coronavirus data Dashboard for individual country data Data sources

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Wages surge across developed world on lower immigration

Wages are booming across the developed world, according to The Economist. Lower skilled workers, in particular, are benefitting from the collapse in immigration: Oxford Economics, a consultancy, finds that pay in the rich world is growing at a rate well north of its pre-pandemic average. The acceleration in compensation per employee across the OECD, a

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Containers go down with the ships

Some more creeping weakness in the massively inflated price of trade infrastructure. As we know, Pacific routes are tumbling: Now, containers are falling as well: Chinese ports have cleared though the US west coast is still congested. The Baltic Dry has slowed too but it’s too early to declare a peak: Some semiconductor markets have

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Australia should support Taiwan’s entry to TPP and block China’s

China has officially sought to join the 11 member Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), and is expected to lobby against Taiwan’s inclusion. Taipei Economic and Cultural Office in Australia representative Elliott Charng told a parliamentary inquiry in Canberra yesterday that Taiwan’s membership of the CPTPP would be of mutual benefit, and has

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Shipping, chips begin to deflate

I noted last week that shipping rates from China to the US had begun to deflate: Semiconductors appear to have peaked now as well: The US inventory shortage appears to have bottomed: Here are the components: A expect all of these industrial prices to boom and bust like lumber and iron ore before them. Not

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Weekly COVID-19 (Coronavirus) statistics and analysis flipbook

See our Coronavirus data Dashboard for individual country data. COVID-19 statistics and cases around the World   Europe     Americas     Asia   Australia High Vaccination Nations     More COVID-19 Statistics and Analysis See our latest blog posts or podcasts here. See our Coronavirus data Dashboard for individual country data Data sources

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Population ageing will drive up wages

Professor Charles Goodhart – professor emeritus at the London School of Economics – told a European Central Bank forum that population ageing across the globe will reduce the supply of workers, tighten labour markets and result in higher wage growth: “In many of the key continental countries, the growth in the working age population is

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2008 called. It wants its recession back

For much of this year, I have argued that the best analogy for markets is the great 2015 deflation. That has played out in Chinese growth and key commodity prices for Australia. However, more recently, the energy perfect storm has overtaken that metaphor and I have begun making reference to an earlier period. A closer

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Weekly COVID-19 (Coronavirus) statistics and analysis flipbook

See our Coronavirus data Dashboard for individual country data. COVID-19 statistics and cases around the World Europe       Americas       Asia   Australia High Vaccination Nations     More COVID-19 Statistics and Analysis See our latest blog posts or podcasts here. See our Coronavirus data Dashboard for individual country data Data

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Global energy panic builds towards shock

It’s off the hook now. Thermal coal futures are out of control: Coking coal futures are out of control: LNG futures are out of control: Oil is a poor second cousin but still rose: The trigger was a China panic: China’s central government officials ordered the country’s top state-owned energy companies — from coal to

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Deloitte: Soaring shipping costs driving up inflation

From Deloitte’s Weekly Economic Briefing: Price pressures Lockdowns have meant Australia’s economy has moved sharply backwards in the September quarter. But for much of the rest of the world, while COVID outbreaks continue to disrupt, the economic recovery over recent months has been strong. Behind the recovery has been massive amounts of government fiscal supports,

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Australia flips the bird to China on TPP

I  noted earlier this week how China has officially sought to join the 11 member Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which came into effect in late 2019. However, Australia has indicated that it will block China’s admission on the grounds that it has contravened existing agreements with trade strikes against Australian exports.

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Australia right to block China from TPP trade pact

Last week, China officially sought to join the 11 member Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which came into effect in late 2019: Beijing seeks to join the 11-member Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), formerly called the Trans-Pacific Partnership. Chinese Commerce Minister Wang Wentao presented China’s application to New Zealand

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Proof COVID vaccines work

A recent survey of hospital ICU admissions in the United States showed that the overwhelming majority of COVID patients were unvaccinated: ABC News contacted 50 hospitals in 17 states, and asked them to share data on their ICU wards’ current COVID-19 patients, including their vaccination status. In the surveyed hospitals, ABC News found that the

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Five lessons from the semiconductor shortage

BofA with the note, in the hope that Canberra gives a flying $%&#: Autos, chips and Covid: five economic lessons Global supply chains are in disarray. A series of pandemic-related shocks have disrupted production, while goods demand has soared as consumers have substituted away from high-touch services. Each item faces its own specific set of

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Would Melbourne open up with 500 cases a day?

Denmark on Friday ditched vaccine passports and axed its remaining COVID restrictions after coming “out the other side of the pandemic”: With no masks in sight, buzzing offices and concerts drawing tens of thousands, Denmark on Friday ditched vaccine passports in nightclubs, ending its last Covid curb. The vaccine passports were introduced in March 2021

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Asian exports rebound on broad demand recovery

Goldman with the note: Bottom line: Exports in three Asian economies of which trade data are released early (mainland China, Korea and Taiwan) rebounded 3.6% mom sa in August in nominal USD terms, each above respective consensus expectations. Sequential gains were led by a strong turnaround in non-tech exports, helped by robust demand globally, especially

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Where are we on the monetary easing cycle?

Societe Generale with the note Monetary policy has been in an easing phase since the Fed’s first rate cut in July 2019, with the policy – rate staying at the zero bound since March 2020. Financial conditions have eased globally, touching historic lows, with pandemic – induced peak quantitative easing (QE) and other emergency stimulus

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Long live labour shortages

The Guardian’s Larry Elliott asks the pertinent question: “what’s so wrong with labour shortages driving up low wages?”: If labour shortages are driving up the wages of low-paid workers then what is wrong with that? There may well have been worse decades than the 2010s to be a wage earner but you would have to

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AstraZeneca rated the best Delta COVID vaccine

Last week I questioned whether Australia had backed the wrong vaccine, given research suggested that AstraZeneca was more effective against the Delta strain than Pfizer. A new study analysing COVID-19 related outcomes from Bahrain between December 2020 and July 2021 shows that recipients of the AstraZeneca vaccine were hospitalised less and experienced less death than

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UK shows path out of COVID

To date, the UK has vaccinated 89% of its adult population with a first vaccine dose and 76% with a second. This means that 60% of its total population is fully vaccinated, placing the nation among the world’s leaders on vaccine coverage (see next chart). With the UK soon to roll out COVID-19 vaccines universally

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MS: Semiconductor shortage peaking

Morgans Stanley with the note: More risk than reward entering late cycle. While pricing is still moving higher, the rate of change is approaching peak as supply is catching up to demand. Our cycle indicator has shifted out of ‘midcycle’ to ‘late-cycle’ for the first time since 2019 and this phasechange has historically meant a

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Covid herd immunity an impossible goal

The UK’s top vaccine boss, Professor Sir Andrew Pollard, director of the Oxford Vaccine Group, believes that the idea of achieving ‘herd immunity’ from COVID from high vaccination rates is “mythical” and “not a possibility” with the current Delta variant: “We know very clearly with coronavirus that this current variant, the Delta variant, will still

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As Aussies lock down harder, Britons enjoy more freedoms

On 19 July, ‘Freedom Day’ was declared and the United Kingdom lifted almost all remaining COVID restrictions. Bars, nightclubs, music festivals and other crowd-based activities opened and Britons partied. Contrary to the predictions of experts, reported COVID infections have almost halved: Hospitalisations remain way below prior peaks: As are COVID deaths: The reason for the