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U.S. leading indicator points to further economic recovery in June

A gauge of future U.S. economic activity increased in June, suggesting the economy continued to recover from the recession caused by the novel coronavirus outbreak. The Conference Board on Thursday said its index of leading economic indicators (LEI) rose 0.7% last month to 115.1, topping its previous peak reached in May. That was shy of economists’ expectations of a 0.9% increase, according to a Reuters poll. “June’s gain in the U.S. LEI was broad-based and, despite negative contributions from housing permits and average workweek, suggests that strong economic growth will ...

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ECB’s Wunsch uncomfortable with multi-year commitment on rates

European Central Bank policymaker Pierre Wunsch said on Friday he was uncomfortable with the ECB’s new guidance, which financial markets have taken as a commitment not to raise interest rates for “five or six years”. Wunsch was one of just two ECB governors who dissented from Thursday’s decision to push out the timing of any rate hike, which is now off the table until inflation is within sight of the euro zone central bank’s 2% target. Wunsch said his disagreement “shouldn’t be dramatised” but went on to say the ECB ...

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Eurozone consumer confidence drops surprisingly as new cases rebound

Consumer confidence in the eurozone decreased from -3.3 to -4.4 in July. The June reading was among the highest ever recorded and this surprising drop still leaves confidence well above historic averages. Still, it is a sign that consumers have become slightly more cautious as the Delta variant starts to take hold in most eurozone economies. The increased cases have caused governments to change course a bit on a fast reopening, with some delays in easing measures and some tightening also announced. This will somewhat dampen the strong growth pace ...

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IMF says Fed ‘highly effective,’ must carefully communicate withdrawal plans

The International Monetary Fund’s Executive Board said the U.S. Federal Reserve has been “highly effective” at managing the COVID-19 crisis and supporting recovery with its commitment to overshoot a 2% inflation target in the near term. The board, releasing its full report here on its annual assessment of U.S. economic policies, said the Fed must carefully communicate its thinking to ensure that the eventual withdrawal of monetary accommodation and asset purchases is orderly and transparent. The IMF has raised concerns that higher U.S. interest rates will drain capital flows from ...

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Outlooks for Financial Institutions Ratings Continue to Stabilise

The number of negative Outlooks and Watches on global financial institutions’ (FIs) ratings continued to decline in 2Q21, signalling that pressure from the pandemic is receding, Fitch Ratings says in a new report. The proportion of bank ratings on Negative Outlook or Watch went below 50% for the first time since before the crisis and was about 40% by the end of the quarter. For non-bank financial institutions (NBFIs) and insurers, about 20% and 15%, respectively, of ratings were on Negative Outlook or Watch at end-2Q21, almost back to pre-crisis ...

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Global venture capital investments hit record high

Global venture capital investments are at record levels this year, boosted by a surge in equities, higher liquidity and an increased interest in sectors that have benefited from the coronavirus pandemic. According to Refinitiv data, global venture capital funds invested $268.7 billion so far in 2021, far outstripping their total investments of $251.2 billion a year earlier. The bulk of those deals were in software, e-commerce, digital healthcare and fin-tech companies, whose products and services have seen strong demand during the pandemic, data showed. “(Lockdowns) and changes in consumer behaviour ...

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China, Fred Astaire And The Countries Dancing Towards The Digital Future

The digital economy is undeniable. But not well defined, understood, or easily measurable. The digital economy is also not evenly distributed around the world. There are digital haves and have nots between countries and within them as well. These disparities cross gender and other demographics and exist throughout the companies that operate within them as well. Tufts University has recently updated its research on the state of digital economies across 90 countries. I interviewed the Principal Investigator of the study, Dr. Bhaskar Chakravorti, Dean of Global Business at The Fletcher ...

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G20 struggles over progress on climate goals

Environment and energy ministers from the Group of 20 rich nations made little progress on Thursday (Jul 22) on how to reach climate goals, officials said, with a cluster of countries resisting firm commitments. Near the sumptuous royal palace in Naples where the meeting took place, thousands of flag-waving marchers protested against what they said was a lack of action on global warming. The G20 meeting discussed biodiversity and the natural environment on Thursday, while energy and climate change will be on Friday’s agenda. Diplomats have struggled for days to ...

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From China to Germany, floods expose climate vulnerability

Deadly floods that have upended life in both China and Germany have sent a stark reminder that climate change is making weather more extreme across the globe. At least 25 people in the central Chinese province of Henan died on Tuesday, including a dozen trapped in a city subway as waters tore through the regional capital of Zhengzhou after days of torrential rain. Coming after floods killed at least 160 people in Germany and another 31 in Belgium last week, the disaster has reinforced the message that significant changes will ...

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Despite challenges, China attractive for foreign investors: economist

China and its companies will continue to attract foreign investments, but tensions on a number of issues like trade and tech with the United States increases the risk of a decoupling between the two economies, an economist and a strategist said. China’s management of recent crises while maintaining its leading position as a global manufacturing hub, along with the Biden administration not escalating the Trump-era tariff-war are seen as positives, they told the Reuters Global Markets Forum. “The adversities – trade war and COVID-19 – which (were) thought to be ...

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Reusing 10% Will Stop Almost Half of Plastic Waste From Entering the Ocean

It is possible to prevent almost half of annual plastic ocean waste by reusing just 10% of our plastics products. This is just one of the key findings of The Future of Reusable Consumption Models Report. The report is a collaboration between the World Economic Forum and Kearney and suggests that shifting from single use towards a ‘reuse’ model of consumption can help society regain ground in the fight against plastic waste. Currently, 50% of global plastic production is for single use and only 14% of global plastic packaging is ...

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From coal to cars, Chinese floods tangle supply chains

The floods drenching central China and submerging swathes of a major economic and transport hub are threatening supply chains for goods ranging from cars and electronics to pigs, peanuts and coal. Power had been partly restored and some trains and flights were running on Thursday but analysts said disruption could last for several days, pushing up prices and slowing business across densely populated Henan and neighbouring provinces. Zhengzhou, Henan’s capital of 12 million people, 650 km (400 miles) southwest of Beijing, is the junction for the major north-south and east-west ...

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Subdued EM Growth Weighing on Ratings

Weak emerging-market (EM) GDP growth is weighing on sovereign ratings, Fitch Ratings says. The median rise in GDP per capita in US dollars at market exchange rates for 81 Fitch-rated EMs over 2011–2021 is set to be only 10%, compared with 39% for the US. Median real GDP growth has been slowing since the mid-2000s, but still averaged 4.0% over 2010–2019. However, it can paint an overly rosy picture of living standards where it reflects population growth or is undercut by real exchange-rate depreciation. GDP in US dollar terms is ...

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ECB pledges low rates for longer, warns about Delta variant

The European Central Bank pledged on Thursday to keep interest rates at record lows for even longer to boost sluggish inflation and warned that the Delta variant of the coronavirus posed a risk to the euro zone’s recovery. The central bank of the 19 countries that share the euro said it would not hike borrowing costs until it sees inflation reach its 2% target “well ahead of the end of its projection horizon and durably.” “We did so to underline our commitment to maintain a persistently accommodative monetary policy stance ...

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Why The Entire Economy Will Be Run By Digital Giants

In his new book, Everybody Wants to Rule the World (HarperCollins, July 2021), business analyst Ray Wang describes the future of business. His book predicts that by 2050, the global marketplace will comprise around 50 giant duopolies. In each market, there will be only two dominant giants. Sector after sector, writes Wang, has already become “a bloodbath” with one-or-two winner-takes-all. “Facebook dominated social media. Amazon took over commerce. Google ruled search. Netflix won the streaming wars. Add the global COVID-19 pandemic in March 2020, and the gaps between winners and ...

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