In today’s briefing:
- CX Daily: EU Probe Into Chinese EV-Makers’ Alleged State Support
- Energy Watch: The perfect bull-signal delivered by Olaf Scholz?
- EM by EM #29: Biden’s Party, EM’s Hangover & Scholz’s Nightmare
- Out of the Box #23: Why the Treasury undershoots actual issuance needs
- UK Pain More Persistent Than BoE Thinks
CX Daily: EU Probe Into Chinese EV-Makers’ Alleged State Support
- Probe / Caixin Explains: EU probe into Chinese EV-makers’ alleged state support
China-Australia /: China, Australia agree to boost engagement in trade, energy
Property /: China should avoid a real estate ‘hard landing,’ former Chongqing mayor says
Energy Watch: The perfect bull-signal delivered by Olaf Scholz?
- We typically release our weekly EIA Watch on Thursdays but given this press release from the EIA, we will not be able to update the demand side data this week.
- Instead, we will have a look at some of the most important indicators in the Energy space as oil markets have left blood on the streets lately, leading Saudi Arabia to once again “call out” short sellers.
Is there a fundamental downturn in demand or is this recent trend in oil once again driven by the positioning of paper markets?
EM by EM #29: Biden’s Party, EM’s Hangover & Scholz’s Nightmare
- Here at Steno Research, our primary concern has been growth rather than inflation since around the end of H1.
- While this divergence is gradually gaining mainstream recognition, emerging markets have been well ahead of the curve.
- Consequently, disinflationary surprises continue to be prevalent.
Out of the Box #23: Why the Treasury undershoots actual issuance needs
- Main takeaways: The recent bond-relief onset by the QRA needs risk-off sentiment to be sustained. If not we may well see further pain coming into 2024
- CBO’s & OMB’s forecasts are all over the place and based on a soft landing and no additional spending for 2024 (good luck)
- Treasury Borrowing Advisory Council’s funding recommendations that outline the issuance plans are based on the forecasts above and will likely surprise markets substantially unless we see a fiscal consolidation
UK Pain More Persistent Than BoE Thinks
- The BoE supported its assessment of cyclical inflationary pressures by raising its NAIRU estimate but still sees that contribution and effective inflation expectations easing.
- We believe stickier expectations are supporting wages, which would better fit the gloomier recruitment surveys and stability in structural determinants of unemployment.
- Excessive wage settlements may prove surprisingly resilient, encouraging the BoE to stay on hold longer than it currently envisages. We see the first BoE cut in 2025.
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