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Fed’s Mester On Board With November Taper, 2022 Rate Rise

Federal Reserve Bank of Cleveland leader Loretta Mester said Friday she supports the U.S. central bank beginning the process of slowing its bond buying stimulus effort starting at the next monetary policy meeting. “In my view, the economy has met those conditions, and I support starting to dial back our purchases in November and concluding them over the first half of next year,” Ms. Mester said in the text of a speech. Her comments on the Fed’s now $120 billion per month in Treasury and mortgage bond buying follow this ...

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Lifting international travel restrictions will boost U.S. economy -Commerce chief

U.S. Commerce Secretary Gina Raimondo said that the decision by the Biden administration to lift international travel restrictions in early November will be a boost to the U.S. economy, especially for tourist destinations like New York and for business travel. Raimondo said the decision announced Monday to allow fully vaccinated foreign nationals to fly to the United States “is huge. I think it will really be a boost to our economy, it will certainly be a boost to travel, tourism, hospitality.” To address COVID-19 concerns, the U.S. has barred most ...

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DG Okonjo-Iweala: Vaccine policy key to sustainable economic and trade recovery

Speaking at the virtual White House Global COVID-19 Summit on 22 September, Director-General Ngozi Okonjo-Iweala said sustainable economic and trade recovery can only be achieved with a policy that ensures rapid global access to vaccines. “We have a choice,” she said. “Either we converge downwards by allowing the virus to drag us all back down, or we converge upwards by vaccinating the world.” Her speech is below. President Biden, Excellencies, Ladies and Gentlemen, Vaccinating the world is a moral, practical, and economic imperative. Moral, because we cannot accept that in ...

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Key events in EMEA next week

Hungary: Labour market recovery expected Labour market data is due from Hungary next week, and we expect further signs of strength. The unemployment rate should remain around 3.9% as labour shortages are mounting and companies are having a hard time filling vacancies. Wage growth will rebound in July from a low rate in June, which was impacted by the high base from last year due to one-off salary payments to healthcare workers. The Manufacturing PMI will probably mirror what we saw in the eurozone: a mild deterioration signalling a slowing ...

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India cenbank to retain cash surplus, may announce GSAP auction

India’s central bank is likely to retain a surplus of liquidity in the banking system and announce another round of bond purchases, but will avoid adding incremental cash in the near future, two sources said on Friday. Funds parked with the Reserve Bank of India (RBI), in its reserve repo window, have averaged about 7 trillion rupees ($95 billion), while the government’s cash balances with the central bank are about 3.4 trillion. This fiscal year, the RBI has bought bonds worth 2.05 trillion rupees in auctions forming part of its ...

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Thai August exports miss forecast on coronavirus curbs

Thailand’s exports rose less than expected in August as coronavirus restrictions affected manufacturing and logistics, the commerce minister said on Friday, even though a weaker baht THB=TH provided a boost. The curbs were imposed in July and August to contain the Southeast Asian nation’s worst coronavirus outbreak to date. But they have been relaxed from this month as the outbreak eases. Exports, a key driver of Thailand’s growth, rose 8.93% in August from a year earlier, missing a forecast for a rise of 13.5% in a Reuters poll, and against ...

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UK has 10 days to save Christmas, retail industry says

The lobby group that represents Britain’s retail industry said on Friday that unless more drivers are found in 10 days to alleviate an acute shortage then significant disruption in the run-up to Christmas is inevitable. “HGV drivers are the glue which hold our supply chains together. Without them, we are unable to move goods from farms to warehouses to shops,” said Andrew Opie, director of food & sustainability at the British Retail Consortium. “Unless new drivers are found in the next ten days, it is inevitable that we will see ...

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Govt undertaking second generation of reforms; economy moving towards double-digit growth: BJP

All major economic indicators suggest that the Indian economy is undergoing V-shaped recovery and has reached at the pre-Covid level, BJP spokesperson Gopal Krishna Agarwal said. The BJP Thursday said the country’s economy has come “out of woods” in the post-Covid period and is moving towards double-digit growth and sustainable higher rate of growth. All major economic indicators suggest that the Indian economy is undergoing V-shaped recovery and has reached at the pre-Covid level, BJP spokesperson Gopal Krishna Agarwal said. Addressing a press conference at the BJP headquarters, he said ...

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Nomura cuts China 2021 growth forecast to 7.7% from 8.2%

Analysts at Nomura cut their forecast for China’s annual gross domestic product (GDP) growth in 2021 to 7.7% from 8.2% on Friday, citing the impact of factories pausing operations amid power outages and environmental policies. “Over recent weeks, a surging number of factories across China have been forced to cease operations,” due to higher coal prices hitting power supplies and government mandates to meet carbon emission reduction targets, they said in a note. This downward pressure on growth comes on top of curbs on the property sector which have added ...

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Rates Spark: Central bank palooza

The Fed’s dots have been shuffled forward, but the back end is asking some tough questions The impact effect of the FOMC outcome was a mild ratchet higher on front end rates and a mild nudge lower in longer tenor rates. But there is also some volatility evident as the market digests that while nothing has actually changed, the timing of the first hike is now sooner and a more complete taper announcement is more probable from the November meeting. Risk assets seem quite unbothered about the Fed’s intentions, which ...

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Italy business confidence slips in Sept but consumer morale hits record high

Morale amongst Italian businesses slipped for a second month running in September but consumer confidence jumped to its highest level for more than 23 years, data showed on Friday. National statistics institute ISTAT’s manufacturing confidence index edged down to 113.0 in September from 113.2 in August, but was still above a median forecast of 112.6 in a Reuters survey of eight analysts. ISTAT’s composite business morale index, combining surveys of the manufacturing, retail, construction and services sectors, came in at 113.8 in September, down from August’s reading of 114.0. However, ...

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Bank of England hints at tightening but rate hike still some way off

The latest BoE statement will fuel talk of an early-2022 rate hike Financial markets have already been toying with the idea of a first Bank of England rate hike coming in February next year. And while there are no huge bombshells in the latest policy statement, it will probably only reinforce the market’s rate hike timeline. Admittedly, there’s clearly a wide range of views on the committee – particularly on how problematic the forthcoming rise in inflation is likely to prove. The accompanying meeting minutes contain plenty of ‘some people ...

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UK consumer morale wilts under cost-of-living crisis: GfK

Growing worries over energy bills, food costs and tax hikes prompted a hefty drop in British consumer confidence this month as people became more downbeat about the economic outlook, a survey showed on Friday. The GfK Consumer Confidence Index fell to -13 in September from -8 in August, the lowest reading since April and the biggest monthly drop since October 2020, when a surge in COVID-19 cases led to renewed lockdown restrictions. A Reuters poll of economists had pointed to an unchanged reading. The readings come a day after the ...

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Japan factory output seen down again in August on supply chain disruption

Japan’s factory output likely fell again in August as the country’s manufacturing sector faced supply chain disruptions driven by a global chip shortage and the spread of the Delta coronavirus variant in Southeast Asia. Retail sales also likely eased in August after a sharp rise in July, according to the poll, underscoring the fragility of domestic consumption and shattering policymakers’ hopes that Japan’s export-based recovery from the coronavirus pandemic would become more broad-based. Separate data is expected to show Japan’s jobless rate inched up in August and job availability eased ...

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China is too large to ignore, but here’s why it differs from most other investments

Tread carefully in the China trade, says one top exchange-traded fund provider. Asia markets bounced back Thursday after a week of selling spurred by debt issues at Evergrande, one of China’s largest property developers. Evergrande’s problems shouldn’t render China a no-touch zone for investors, said DWS Group’s Arne Noack, one of the brains behind the Xtrackers Harvest CSI 300 China A-Shares ETF (ASHR). “China is very much investable. However, we would definitely caution that China should not be looked at as a market like the U.S. or, let’s say, most ...

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