In today’s briefing:
- Central Banks’ Policy Pivot Impact on Developed Markets
- Crude Oil Prices to Fall Forecasts EIA on Weak Demand Growth & Strong Inventory Buildup
- CPI Nugget: Kiss your 2% target goodbye, Powell?
- Energy Watch: Red Sea Situation Is Worsening with Spill-Overs to Energy
- CX Daily: Huawei Aims to Pull Ahead of Tesla in Autonomous Driving Race
- UBS Economist Expects Less Property Drag on China’s Economy in 2024
Central Banks’ Policy Pivot Impact on Developed Markets
- Throughout 2023, the global developed economy was at the forefront of tackling rising inflation that has been gathering steam since mid-2022.
- The majority of developed G20 countries saw their central banks raise policy rates at record pace to tame rampant price increases.
- Rapid tightening and the potential of an upcoming pivot has resultantly upended stability in growth prospects for the upcoming year.
Crude Oil Prices to Fall Forecasts EIA on Weak Demand Growth & Strong Inventory Buildup
- Despite supply cuts by OPEC members the EIA expects supply to outpace demand for most of 2024 and 2025.
- The agency forecasts the average spot price of WTI and Brent to decline in 2024 and 2025.
- Concerns of tepid global demand and inventory build-up grow as short positions in the crude oil options market jump.
CPI Nugget: Kiss your 2% target goodbye, Powell?
- Inflation once again printed smack-dab at our target of 3.9% YoY core inflation and even if there are mixed signals beneath the hood, we are growing increasingly certain that US inflation will not print at 2% or below in this cycle.
- The shelter component is probably not waning fast enough for inflation to reach target before a cyclical reacceleration in prices will take goods categories higher again.
- H2-2024 pricing for the Fed looks oddly off given this.
Energy Watch: Red Sea Situation Is Worsening with Spill-Overs to Energy
- Welcome to our Energy/EIA watch; we continue to see extraordinary strong demand for energy in the US, but weaker demand in Europe and China.
- Meanwhile, the situation worsens in the Red Sea.
- Oman begins an investigation into the hijacking of an oil tanker in the Gulf of Oman as Iran’s semi-state agency Tasnim confirmed that Iran was behind the hijacking.
CX Daily: Huawei Aims to Pull Ahead of Tesla in Autonomous Driving Race
- Self-driving / In-Depth: Huawei aims to pull ahead of Tesla in autonomous driving race
Corruption /: Beijing health insurance director detained, source says
Central bank /: Former China central bank deputy governor abused power for 30 years
UBS Economist Expects Less Property Drag on China’s Economy in 2024
- The property slump is expected have slightly less of an impact on China’s economy in 2024 than feared, while fiscal support will play a bigger role, Wang Tao, UBS’s chief China economist, said at a Tuesday seminar.
- The year-on-year growth rate in 2024 will be lower than that in 2023, but the economy will continue to recover and stabilize with a growth rate of about 4.5%, Wang said.
- The biggest drag on the economy from the property slump happened in 2022, the economist said.
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