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Livesquawk - Closing Wrap - Friday 17.09
Closing Wrap - Friday 17.09
Headlines
  • House To Vote On Debt Ceiling Next Week Amid Political Standoff
  • White House Warns States Of Potentially Dire Effects If Government Defaults
  • Moderna Shot Retains Hospitalization Protection; Pfizer’s Wanes
  • Pelosi Warns UK Not To Imperil N.Ireland Peace With Brexit
  • Amber List Scrapped In Overhaul Of Travel Rules In England
  • UK Tsy Tells Gove Not To Expect Lots Of New Cash For Levelling Up
  • Gold Futures Mark Lowest Settlement In Over 5 Weeks
  • Iron Ore Tumbles 20% In Worst Week Since 2008 Financial Crisis
  • Apple Card Owners Are Having Problems Ordering Their iPhone 13
  • Airbus Union Warns Of More Germany Strike Action
  • Valeo Is Ready To Buy Out Siemens From Venture In Race To EVs
Commentary
Canada Election Preview: PM Trudeau Holds Slim Lead

Canadian voters hit the polls on Monday 20 September, with Trudeau’s Liberal party leading by a tight margin, according to recent polls. Given the current outlook, another Liberal minority government looks to be a likely result.

 

All three parties are promising to exercise largely deficit-financed expansionary fiscal spending policies expected to provide short-term boosts to the economy. However, with none of the three parties planning to balance their budgets, this initial relief could mean continued deficits and growing public debt over the next five years.

 

The Liberal platform would add an estimated of CAD 70 bln[EC1]  to federal debt by 2025-2026, with CAD78Bln allocated to new expenditures, CAD26Bln forecast for new revenues and CAD15Bln for Covid prudence.

 

The Conservatives would be adding an anticipated CAD54Bln to federal debt by 2025-2026, with CAD60Bln earmarked for new expenditures (this includes their Covid prudence spending budget) and CAD9Bln in new revenues. (LiveSquawk – Continue Reading)

Debt Ceiling Impasse? Fed's 'Loathsome' Game Plan For The 'Unthinkable'

Treasury Secretary Janet Yellen says failure to raise the U.S. debt limit could lead to the unthinkable: a default on government payment obligations. That's an outcome the White House on Friday warned could plunge the economy into recession.

 

If the impasse in Congress over the$28.5 trillion debt limit isn't resolved before an October deadline, what would the Federal Reserve - the backstop for U.S. financial markets as the lender of last resort - be prepared to do?

 

As it turns out, Fed Chair Jerome Powell may already have something of a game plan. The country faced a similar crisis over the debt limit in 2011 and again two years later, and at an unscheduled October 2013 meeting, Fed policymakers - including Powell, who was then a Fed governor, and Yellen, who was the Fed's vice chair - debated possible actions in response. (Reuters – Continue Reading)

Sentiment Remains Shaky Amongst US Consumers

Image Source: University Of Michigan

The University of Michigan reports that consumer sentiment remained weak as Covid's resurgence and the rising cost of living weigh on peoples' minds. Nonetheless, consumers continue to spend and with household finances and incomes in decent shape, and Covid showing signs of peaking out, we think this will continue

 

At least it didn't get worse...

 

The September University of Michigan consumer sentiment report has posted an underwhelming rise to 71.0 from 70.3, below the consensus 72.0 forecast. A combination of Covid resurgence and anxiety about the rising cost of living were responsible for the seventh largest ever drop in sentiment in August and the hope was that this was an outsized reaction that would be at least partially reversed. Unfortunately, all we got was a 0.7 point increase with confidence remaining weaker than in the depths of the lockdowns last year, keeping it on a par with levels last seen a decade ago. (ING – Continue Reading)

Surprise Drop Leaves UK Retail Sales Lower For 4th Straight Month

UK retail sales fell at an annual rate of 0.9% in August after a decline of 2.8% in July, offering the latest surprise for the summer as analyst consensus had forecast a 0.5% last month.

 

The fourth straight decline indicated that a resurgence of Covid-19 cases in the UK is taking a toll on consumer confidence. The consecutive contractions represent the worst stretch for retail sales since 1996.

 

The ex-fuel measure declined 1.2%, more than the expected fall of 0.8%, but better than July’s 2.4% decline.

 

The Office for National Statistics (ONS) said non-food stores reported a 1.0% decrease in sales volumes in August, which was driven by a 3.7% decline at department stores and a 1.2% drop at other outlets such as sporting goods and computer stores. (LiveSquawk – Continue Reading)

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