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What, me worry? Fed chief’s emotional tone can drive markets, study suggests

Jerome Powell took over as head of the Federal Reserve in 2018 pledging a plain-spoken, language-of-the-people approach to talking about monetary policy. It turns out that’s a bit of a downer: New research using artificial intelligence and voice analytics rates Powell as the most negative of the last three chairs of the U.S. central bank, with his predecessor Janet Yellen the best able to maintain a neutral tone at her news conferences and Ben Bernanke before that a comparative cheerleader. Markets, in turn, may have noticed. The authors of the ...

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U.S. CBO sees debt default in Oct or Nov if no debt limit hike

The U.S. Treasury Department is likely to be unable to pay its bills and provide funding for certain benefit programs sometime in October or November unless Congress approves legislation extending the agency’s statutory borrowing authority, the non-partisan Congressional Budget Office forecast on Wednesday. “If that occurred, the government would be unable to pay its obligations fully, and it would delay making payments for its activities, default on its debt obligations, or both,” the CBO said. Source: Reuters (Reporting by Richard Cowan Editing by Chris Reese)

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ECB set to promise even longer support to charge inflation

The European Central Bank is all but certain to promise an even longer period of stimulus on Thursday to make good on its commitment to boost inflation, but the debate among policymakers is likely to be tense and no new measures will be announced. The Governing Council will meet for the first time since the ECB unveiled a tweaked inflation target earlier this month, the culmination of an 18-month strategic review of its roles in an array of areas from inflation to climate change. Among its conclusions, it said longer ...

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PIMCO: China Macro Focus

2021 baseline growth forecast is revised up from mid 8% to high 8%, prompted by the stronger-than-expected 2Q growth and the “no over-tightening” policy signal sent by the recent RRR cut, but a more constrained off-budget fiscal spending. · We expect solid growth in 2H. There are, however, a number of uncertainties including: o Soft consumption recovery: a hiccup or a permanent loss. o Strong exports: how much longer it can sustain. o Regulatory tightening: how far the government will push it, including property, tech, de-carbonization, LGFV, etc. o Liquidity/Financial ...

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Covid appears to be the ‘Achilles’ heel’ for Southeast Asian economies, says Jefferies

The failure to contain Covid infections is impeding the recovery of many Southeast Asian economies, says Sean Darby from Jefferies. “Indonesia, like many of the ASEAN economies, has yet to really get to grips with the Covid-19 virus,” Darby, global head of equity strategy at the U.S. investment bank, told CNBC’s “Squawk Box Asia” on Tuesday. “That seems to be the Achilles heel for the ASEAN economies at the moment,” he said referring to Association of Southeast Asian Nations regional grouping. Goldman Sachs recently slashed its 2021 growth forecasts for ...

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Economic Improvement And Small Business Growth Could Be Held Back By Messengers And Misinformation On Vaccines

As more people get vaccinated, more of us are going back to work, and small business owners are starting to feel optimistic about their future. The June 2021 NFIB Foundation Small Business Optimism Index found that small business owners are feeling more positive as the economy opens up and a May 2021 Reimagine Main Street survey shows small business owners optimism is fueled by availability of vaccines. We are also seeing signs of economic progress. For example, the U.S. economy added 850,000 jobs in June, which was higher than expected. ...

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Asian regional integration needs to ramp up to prevent COVID flareups

The Asian Development Bank (ADB) lowered its GDP growth outlook for “developing Asia” this year to 7.2 percent from the previous 7.3 percent forecasted in April, citing reasons of the resurgence of COVID-19 epidemic in some of the countries and regions. “Asia and the Pacific’s recovery from the COVID-19 pandemic continues, although the path remains precarious amid renewed outbreaks, new virus variants and an uneven vaccine rollout,” said ADB Chief Economist Yasuyuki Sawada in a statement. Developing Asia refers to the bank’s 46 members, covering economies from the Asia and ...

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Far from taper, ECB could tee up another $1 trillion of QE

If you’re waiting for the imminent end of central banks’ bond buying “quantitative easing” – make sure you’re sitting comfortably. The European Central Bank could well throw another $1 trillion log onto the fire as soon as this week. As government borrowing rates sank across the world this week and stocks shivered, it appeared as if markets were having second thoughts about the long-held assumptions about the end of pandemic lockdowns, searing economic rebounds and widespread reflation. COVID headlines this month have certainly given investors plenty to ponder, even if ...

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US trade recovery accelerates past China in Q2, Tradeshift data reveals—but concerns grow over lack of liquidity

Data from Tradeshift reveals that B2B trade activity across US supply chains accelerated past China in Q2, with the world’s largest economy now setting the pace for global trade recovery heading into the second half of the year. According to Tradeshift’s latest Index of Global Trade Health, which analyzes transaction data between buyers and suppliers, activity levels across US supply chains rose by a relatively modest 2.4% quarter on quarter. This was sufficient to overtake China in terms of cumulative growth compared to pre-pandemic levels. Transaction volumes across Chinese supply ...

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Warning signs for global recovery as Delta dims outlook

A drubbing in world equity markets and a huge flight to safety into U.S. Treasuries this week suggests investors now doubt that a much-anticipated return to post-COVID normality is feasible any time soon. Data from the United States and China, which account for more than half of world growth, suggests a slowdown in the recent blistering pace of the global economy alongside rising prices for all manner of goods and raw materials. Coinciding with a resurgence in the Delta variant of COVID-19, markets may be sending alarm signals about the ...

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IMF to keep 2021 global growth forecast at 6%-Georgieva

The International Monetary Fund is estimating this month that global growth for 2021 will be about 6%, the same as forecast in April, but with some countries growing faster and others more slowly, IMF Managing Director Kristalina Georgieva said on Wednesday. Georgieva, speaking at an online event sponsored by the Peterson Institute for International Economics, said that economic recovery will be held back unless the pace of COVID-19 vaccination picks up, adding that a goal of ending the pandemic by the end of 2022 will not be reached at the ...

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UK’s huge public borrowing falls in June to 22.8 bln pounds

British public sector net borrowing fell to 22.8 billion pounds ($30.95 billion) in June, 5.5 billion pounds less than a year earlier when the public finances were feeling the full force of the coronavirus pandemic, official data showed on Wednesday. Economists polled by Reuters had forecast that public sector net borrowing, excluding public sector banks, would drop to 21.6 billion pounds. Public borrowing for the first three months of the financial year totalled 69.5 billion pounds, down more than 40% from the three months to June 2020, when Britain recorded ...

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New income data script stronger second-half consumption outlook

With China’s per capita disposable income rising, stronger consumption in the second half of this year could catalyze higher economic growth, experts said. On Monday, China’s National Bureau of Statistics released its revised first-half statistics of per capita disposable income. Revised NBS data showed Shanghai’s first-half per capita disposable income topped the national list, reaching 40,357 yuan ($6,219), Xinhua News Agency reported on Monday. As it transpired, Shanghai was the only region that saw its per capita disposable income exceed 40,000 yuan. Beijing’s corresponding figure was 38,138 yuan, a 10.3 ...

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Japan’s exports jump on solid U.S., China demand

Japan’s exports jumped in June led by U.S. demand for cars and China-bound shipments of chip-making equipment, supporting hopes for an export-led recovery in the world’s third-largest economy. Exports rose 48.6% in June from a year earlier, the fourth straight month of double-digit gains, although growth was largely exaggerated by a COVID-led plunge last year. Export growth has remained strong even as a global chip shortage weighs on Japan’s car output and shipments. With consumer spending weakening due to renewed coronavirus curbs in Tokyo, policymakers are counting on external demand ...

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China’s huge spending in R&D and why the U.S. and allies are scared

If news that China’s economy will surpass that of the U.S. in the next few years was suggested by the former, the second largest economy in the world would have been accused of misinformation or chest thumping. According to a new report published by the Aspen Institute, a Washington-based think tank, China will soon surpass America’s research and development (R&D) budget by 2025. As stated in the Government Work Report during the 14th Five-Year Plan (2021-25) period, the country will strive for over 7 percent annual growth in R&D spending. ...

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