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Livesquawk - Closing Wrap - Tuesday 01.06
Closing Wrap - Tuesday 01.06
Headlines
  • OPEC+ Boosts Output In July And Keeps Market Guessing Beyond
  • IEA’s Birol Sees Strong Oil Demand Recovery In Next Six Months
  • WHO Approves Sinovac COVID-19 Vaccine, 2nd Chinese-Made Dose Listed
  • UK Records Zero Covid Deaths For First Time In Over A Year
  • Fed's Quarles Hints He May Stay At Fed After Term As Vice Chair Ends
  • BoE To Adjust Corp. Bond Purchase Scheme From Q4
  • BoE Expresses Unease About Jump In Housing Prices
  • EU Vows To Stop Funds To Rule-Of-Law Scofflaws This Year
  • Abbott Falls After Cutting 2021 Profit Forecast As Testing Slows
  • Robinhood Adds New Board Members To Advance IPO Push
Commentary
Eurozone Headline Inflation Exceeds Expectations And ECB Target

Preliminary headline consumer price growth in the Eurozone surpassed the European Central Bank’s target in May, confirming the bank’s prediction that inflation will temporarily exceed its goal of near but below 2.0%. 

 

Annual consumer price growth in the single-currency area grew 2% in May, a tenth ahead of forecasts and up from 1.6% in April. Core inflation also beat predictions, as it rose to 0.9% year-on-year in May from 0.7% previously.  

 

The main upward contribution came from energy inflation which grew to 13.1% annually, whilst the cost of services increased by 0.2 percentage points, to 1.1%.  

 

“Like a broken record, Eurozone inflation surprised markets (and us) slightly to the upside in May,” said Fabio Balboni, a senior economist at HSBC. “But we are left wondering how much of the upside surprise is ‘genuine.’” (LiveSquawk - Continue Reading)

New $50 Billion Health, Trade, And Finance Roadmap To End The Pandemic And Secure A Global Recovery

The heads of the world’s predominant global financing, health and trade agencies have united to urge government leaders to urgently finance a new $50 billion roadmap to accelerate the equitable distribution of health tools to help end the pandemic that has devastated lives and livelihoods for 18 months and also set the foundations for a truly global recovery, as well as enhanced health security.

 

In a statement published by newspapers around the world, the leaders of the International Monetary Fund, World Bank Group, World Health Organization and World Trade Organization (Kristalina Georgieva, Tedros Adhanom Ghebreyesus, David Malpass, and Ngozi Okonjo-Iweala) said governments must act without further delay or risk continued waves and explosive outbreaks of COVID-19 as well as more transmissible and deadly virus variants undermining the global recovery.

 

Leaders of the four agencies said: “By now it has become abundantly clear there will be no broad-based recovery without an end to the health crisis. Access to vaccination is key to both.” (Continue Reading)

EU Recovery Fund Officially Ready For Take-Off

Image Source: Rabobank (Click To Enlarge)

Last night, the European Commission (EC) sent out a press release stating that all EU Member States have now formally approved the EU’s own resources decision for the EU budget 2021-2027. Crucially, this implies that the EC can now start to issue EU debt securities to fund the EUR 672.5bn (2018 prices) Recovery and Resilience Fund (RRF). Remember, the RRF consists of EUR 312.5bn in grants and EUR 360bn in cheap loans (in total some 5% of EU27 GDP). Hard-hit Member States such as Spain and Italy are eligible for the largest part of the grants in terms of euro’s, while in terms of percent of GDP e.g. Greece stands to benefit even more (figure 1)1. Regarding the loan component, all countries can apply for loans worth 6.8% of their 2019 gross national income. The RRF and hence disbursements will run from 2021 to 2026. (Rabobank - Continue Reading)

Analysis-China's Banks Are Bursting With Dollars, And That's A Worry

A mountain of dollars on deposit in China has grown so large that banks are struggling to loan the currency and traders say it poses a risk to official efforts to control a fast-rising yuan.

 

Boosted by surging export receipts and investment flows, the value of foreign cash deposits in China’s banks leapt above $1 trillion for the first time in April, official data shows

 

A previous jump, late in 2017, preceded heavy dollar selling which turbocharged a steep yuan rally in early 2018.

 

Market participants say the size of the even bigger hoard this time raises that risk, and leaves policymakers’ efforts to restrain the yuan vulnerable to the whims of the exporters and foreign investors who own the cash. (Reuters - Continue Reading)

How The World Ran Out Of Everything

In the story of how the modern world was constructed, Toyota stands out as the mastermind of a monumental advance in industrial efficiency. The Japanese automaker pioneered so-called Just In Time manufacturing, in which parts are delivered to factories right as they are required, minimizing the need to stockpile them.

 

Over the last half-century, this approach has captivated global business in industries far beyond autos. From fashion to food processing to pharmaceuticals, companies have embraced Just In Time to stay nimble, allowing them to adapt to changing market demands, while cutting costs.

 

But the tumultuous events of the past year have challenged the merits of paring inventories, while reinvigorating concerns that some industries have gone too far, leaving them vulnerable to disruption. As the pandemic has hampered factory operations and sown chaos in global shipping, many economies around the world have been bedeviled by shortages of a vast range of goods — from electronics to lumber to clothing. (NY Times - Continue Reading)

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