(Original title: Overseas Financial Media Focus: Mid-Term Election Voting in the United States Has Ended and Congressional Control Could Change Hands)
The Financial Associated Press reported on November 9 that overseas markets focused on the global economy and energy market overnight. In the global economy, a former Fed official said interest rates would need to rise to 5.5% to quell inflation, but that it will fall into a mild recession; analysts said Japan may have cut some US debt to show speculators they have enough ammunition to intervene in the currency market. In the energy market, the EIA lowered its forecast for US crude oil production next year; the European Commission has stated that setting a ceiling for the price of natural gas would affect long-term contracts or security of supply. Furthermore, the midterm election votes of various US states have ended one after the other and control of Congress could change hands.
Reuters: US mid-term elections conclude one after another, congressional control could change hands
The Americans cast their final vote on Tuesday in the hotly contested midterm elections that will determine whether Republicans gain control of Congress and, if so, give them the power to block much of President Biden’s agenda for the next two. years.
Polling stations are closed from 6 p.m. ET (7 a.m. Beijing time on Wednesday), but in competitive states, voting results may not be known for days or even weeks.
Opinion polls and gaming markets show that Republicans appear set to gain control of the House of Representatives and possibly the Senate as well.
Investors are expecting a big Republican victory, an outcome that could ease Democrats’ spending and regulation concerns, but spark a bitter battle when the US debt ceiling is raised next year.
CNBC: Former Fed Official Says Rates Should Go Up To 5.5% To Tame Inflation But Will Slide Into A Mild Recession
On Tuesday (November 8) local time, former Boston Fed Chairman Eric Rosengren said continuing inflationary pressures will force the Fed to raise interest rates to a higher level and that the US economy “will have a major impact. Next year”. a considerable possibility “of a recession.
Rosengren told the media in an exclusive interview that it now appears likely that the Fed will raise its final rate at the end of its interest rate hike to more than 5%, which is higher than traditional investors’ prediction of. 5%. the economy entered a mild recession in 2018.
When asked how high the terminal fee could go, Rosengren said he thought the exact figure was at least 5.5%. She added: “I think the United States will have a mild recession next year.”
Bloomberg: Bank of England Chief Economist: Sharp Labor Force Shrinkage Hints Need for Further Rate Hikes
Huw Pill, chief economist at the Bank of England, said the sharp decline in the size of the UK workforce continues to put upward pressure on inflation, suggesting that further interest rate hikes are needed.
At least 600,000 people have fled the workforce since the coronavirus outbreak in early 2020, Pill said. Although the economy is heading into a recession, this is putting pressure on employers to raise wages.
“It’s a real shock to the economy,” Pill said at an event hosted by UBS on Tuesday. “The rigid job market in the UK is still very persistent, even though our economy is slowing and may already be in recession.”
Pill said the Bank of England is particularly concerned about signs that inflation expectations may be above target, a process known as ‘disengagement’. Politicians must prevent a wage-price spiral, you said.
“Wage concerns, self-sustaining price dynamics and cost setting, given the tight labor market, mean we have more work to do. We will take the necessary steps to bring inflation to 2 percent on a sustainable basis. goal, “Pill told a UBS event.
Bloomberg: Analysts say Japan may have cut some US debt to show speculators it has enough ammunition to intervene in currency markets
Analysts said Japan may have sold some US Treasuries to fund the yen intervention and show speculators that Japan has more ammunition at its disposal than they expected.
Japan’s holdings of foreign securities fell by $ 43.9 billion in October to $ 941.3 billion, according to a report by the Japanese Finance Ministry on Tuesday. A simple comparison shows that it is close to the $ 42.9 billion that Japan invested to raise the yen last month.
In contrast, foreign currency deposits, which have long been considered the main source of funds for foreign exchange intervention, remained roughly stable at $ 137 billion. Analysts previously said that the sell-off of foreign bonds was in danger of being opposed by foreign governments and could exacerbate the depreciation of the yen by pushing foreign bond yields higher.
“Japan is sending a strong signal that the country has ample resources to intervene in the currency market,” said Yuji Yamazaki, a currency strategist at SMBC Nikko Securities. “With these resources, it is possible to withstand the constant onslaught of the market.”
Bloomberg: Bitcoin and other cryptocurrencies plummet across the board, traders doubt Binance’s acquisition of FTX still uncertain
As news of Binance’s possible takeover of rival FTX has been gradually digested, the cryptocurrency market has plummeted again and traders are concerned that industry problems and engagement among big industry players may be lower. .
Binance CEO Changpeng Zhao shocked the cryptocurrency world on Tuesday when he announced that Binance would acquire ailing liquidity rival FTX.com. Observers pointed out that the market was nervous about the prospect of the deal, as Changpeng Zhao tweeted that the letter of intent signed by both sides was non-binding.
Bitcoin plunged about 15% to around $ 17,684 on Tuesday, its lowest level since June, breaking through what some investors see as a key support level. Other cryptocurrencies were also nearly wiped out, with Ether, Polkadot, and Avalanche all plummeting more than 14%, while Solana and Dogecoin all fell more than 28% at one point.
Strahinja Savic, Head of Data and Analytics at FRNT Financial, said: “It is definitely related to the re-emergence of the crisis caused by FTX, which in turn has a solvency crisis. We do not yet know if the problems with FTX have ended or how it will go. to finish “.
Reuters: EIA cuts US crude oil production forecast next year
The U.S. Energy Information Administration (EIA) slashed its forecast for growth in U.S. crude oil production by 21% next year, just days after oil producers warned that inflation and supply chain constraints would continue.
U.S. crude oil production is expected to increase by around 480,000 bpd to 12.31 million bpd, according to the EIA, from a previous forecast of 610,000 bpd.
Reuters: European Commission says setting gas price caps will affect long-term contracts or security of supply
The European Commission told its 27 member states on Monday that it was impossible to set a ceiling for the price of gas without compromising long-term contracts or security of supply, two diplomatic sources told the media. The backlash from Germany and the European Commission has frustrated countries trying to set price limits.
As many as 15 countries calling for a cap threaten to block other elements of an energy deal reached by leaders in October, including the launch of joint purchases, until the executive committee comes up with a realistic proposal for a cap, two sources said and the definition of new price benchmarks.
Bloomberg: FedEx has grounded planes, weak demand pushes companies to take steps to cut costs
FedEx has taken steps to cut costs by cutting some flights and grounding planes due to weak demand for parcel deliveries.
The airline has suspended 23 domestic flights and about nine international flights, Chief Financial Officer Mike Lenz said at an investor conference on Tuesday. He also said the company is also reducing sorting points and consolidating cargoes at ground level.
The measures mirror the company’s efforts in September, when FedEx said it would take a number of important steps to address the daunting task of addressing weakness in Asia and challenges in Europe.
