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U.S. producer prices fall in July; weekly jobless claims climb

U.S. producer prices unexpectedly fell in July amid a drop in the cost for energy products and underlying producer inflation appears to be on a downward trend, while jobless claims rose for a second straight week in a labor market that remains tight. The producer price index for final demand declined 0.5% last month, the first negative monthly reading since April 2020, the Labor Department said on Thursday. The PPI climbed 1.0% in June. In the 12 months through July, it increased 9.8% after advancing 11.3% in June. Economists polled ...

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Here’s what would happen to markets and the economy if China attacked Taiwan

Russia’s invasion of Ukraine this year has roiled global energy markets and caused food shortages in some parts of the world. The disruptions could intensify during the winter, with soaring energy costs causing a recession in Europe and weakening the economies of the United States and many other nations. A broader and more devastating conflict remains possible. A war involving China would be orders of magnitude worse. House Speaker Nancy Pelosi’s recent visit to Taiwan enraged China’s communist government, which has launched missiles over the island and conducted threatening military ...

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Fed now seen delivering 50 bp hike in Sept after inflation eases

Traders slashed bets the Federal Reserve will deliver a third straight 75-basis-point interest rate increase in September after data released Wednesday showed U.S. inflation slowed last month. Consumer prices didn’t rise at all in July compared with June, a U.S. Labor Department report showed, marking the slowest monthly inflation in more than two years as fuel prices dropped. Traders of futures tied to the Fed’s policy rate sent the contracts soaring. Prices after the report show traders now expect the Fed to raise rates by 50 basis points next month, ...

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US inflation has passed its peak

US inflation slows more than expected We don’t often get pleasant surprises surrounding the US inflation data so July’s numbers are something to be cherished. Both the headline and core (ex food & energy) rates reported monthly increases that were 0.2pp lower than expected. Headline CPI was flat on the month (consensus 0.2%), resulting in the YoY rate dropping to 8.5% from 9.1% while the core rate rose “just” 0.3%MoM (consensus 0.5%). The Year-on-Year rate, therefore, stays at 5.9%. Developments within core are primarily responsible for the surprise with the ...

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Retailers turn off lights, cut opening hours to save energy

As energy bills mount and the threat of rationing increases, some European retailers are turning off lights and considering shorter opening hours this winter. Energy bosses and government officials have urged people and businesses to reduce power use and put in place contingency plans so they are less reliant on gas imports if there are shortages linked to the war in Ukraine. The Austrian branch of multinational retail chain SPAR Group is reducing the hours of lighting for storefront advertising and outside its more than 1,500 stores across the country, ...

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China’s economy becomes the world’s economic engine: survey

About 78.34 percent of respondents from 22 countries believe the Chinese economy has injected vitality into the global economy in a decade and has become the engine of the world economy, according to a joint survey conducted by CGTN and Renmin University of China. The survey has interviewed respondents who are 38.64 years old on average from developed countries such as the U.S., the UK, France, Germany, Canada, Australia, New Zealand, Japan, South Korea, Singapore, as well as developing countries like Brazil, Argentina, Mexico, Thailand, India, Pakistan, United Arab Emirates, ...

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Breakdown in ‘breakevens’ holes inflation buffer

If sky-high inflation is indeed rolling over as central banks get tough and recession looms, an already horrible year for investors in inflation-protected securities could get worse. Markets are on tenterhooks again ahead of the critical U.S. consumer price inflation reading for July due later on Wednesday. And many suspect forecasts for a retreat of 40-year high inflation from above 9% will underscore the ‘peak inflation’ narrative that has re-surfaced since mid-year and buoyed all markets by stoking hopes of ‘peak rates’ on the horizon. The drop in energy, food, ...

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Biden says inflation may be easing but people are ‘still hurting’

U.S. President Joe Biden on Wednesday said that inflation is showing signs of moderating but that more work is needed to make consumers’ lives easier. “We’re seeing some signs that inflation may be beginning to moderate,” Biden said after a report showing that consumer prices stayed the same in July. “People were still hurting, but zero inflation last month.” The Labor Department’s Consumer Price Index (CPI) data came as a relief for an administration facing voter anger over inflation ahead of Nov. 8 midterm elections for control of Congress. The ...

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PIMCO: U.S. CPI Report Reaction

Bottom Line: As expected, both headline and core inflation moderated in July (both were below consensus, but in line with our forecast). However, the details of the report were firmer than implied by headline miss vs consensus. Assuming global food and energy commodity prices maintain their recent easing, June likely marks the peak in the year-over-year rate of headline inflation. However, the year-over-year rate of core will likely reaccelerate in August, and isn’t likely to peak until September. The categories that drove the July weakness in core – airfares and ...

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Chinese envoy says ties with Australia must be mended before solving trade issues

China’s ambassador to Australia said that more needed to be done to reset relations between Canberra and Beijing and that the two nations were not at the stage of solving political and trade disputes. Speaking to the National Press Club in Canberra on Wednesday, China’s ambassador, Xiao Qian, also said there had been no meeting between leaders from the two trading partners in recent years because Beijing believed a face-to-face meeting could worsen strained ties. “It’s because we did not believe the meeting would help to improve the relationship and ...

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Biden signs China competition bill to boost U.S. chipmakers

President Joe Biden on Tuesday signed a bipartisan bill that aims to strengthen U.S. competitiveness with China by investing billions of dollars in domestic semiconductor manufacturing and science research. “Today is a day for builders. Today America is delivering,” Biden said at the signing ceremony outside the White House. He was joined by a crowd of hundreds, including tech executives, union presidents and political leaders from both parties. The bill, dubbed the Chips and Science Act, includes more than $52 billion for U.S. companies producing computer chips, as well as ...

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Greece to exit EU’s ‘enhanced surveillance’ framework after 12 years

Greece will exit the European Union’s so-called enhanced surveillance framework on August 20, its finance minister said on Wednesday, a move that will allow the country greater freedom in making economic policy. Greek economic developments and policy have been monitored under the framework since 2018, after Athens exited three international bailouts, totalling more than 260 billion euros, from the European Union and the IMF between 2010 and 2015. “After 12 years … a difficult chapter for our country comes to a close,” said the minister, Christos Staikouras. “Greece returns to ...

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Greek jobless rate eases slightly to 12.1% in June

Greece’s jobless rate dropped slightly in June to 12.1% from 12.5% the previous month, statistics service ELSTAT said. After hitting a record high of 27.8% in September 2013, Greece’s jobless rate has been falling, but it remains the highest in the euro zone. Seasonally adjusted data released on Wednesday by ELSTAT showed 572,109 people were officially unemployed, with those under the age of 24 years still the hardest hit. However, the jobless rate for people aged 15 to 24 dropped to 27.4% in June, from 31.71% in the same month ...

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Is it time for investors to make it big in Japan again?

Japan may have the world’s third-biggest economy after the US and China, but it’s a country that many international investors unfairly overlook. In this troubled year, its stock market has been an oasis of relative calm and stability, dipping only slightly when others have crashed. So, is it time to go big on Japan, again? Investors have shunned the country’s stock markets since the glory days of the 1980s, when everyone said Japan was the future and the Nikkei 225 flew to a high of 38,915 on December 29, 1989. ...

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China central bank says it will step up policy implementation, keep liquidity ample

China’s central bank said on Wednesday it will step up the implementation of its prudent monetary policy and keep liquidity reasonably ample. The People’s Bank of China said it will strive to achieve best possible results in economic operations, while balancing economic growth and price stability, in its quarterly policy implementation report. The central bank said it will also closely monitor domestic and external inflation changes, and that it expects domestic consumer inflation to exceed 3 per cent in some months in the second half of 2022. Source: Reuters

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