Author: Consultant

  • Gas prices rise and hit $3.91 per gallon

    Gas prices rise and hit $3.91 per gallon

    The national average pump price for a gallon of gasoline rose 12 cents over the past week to hit $3.91 on Monday according to data from AAA, fueled by high demand and tight supplies.

    AAA says the recent announcement from OPEC+ stating the group of oil-producing nations would slash output by 2 million barrels per day led to the price of oil creeping above $90 a barrel for the first time in several weeks, contributing to rising costs at the pump. 

    https://www.foxbusiness.com/markets/gas-prices-rise-hit-3-91-per-gallon

  • Farmers Condemn New Zealand’s Proposed Tax On Animal Burps

    Farmers Condemn New Zealand’s Proposed Tax On Animal Burps

    WELLINGTON, New Zealand (AP) — New Zealand’s government on Tuesday proposed taxing the greenhouse gasses that farm animals make from burping and peeing as part of a plan to tackle climate change.

    The government said the farm levy would be a world first, and that farmers should be able to recoup the cost by charging more for climate-friendly products.

    But farmers quickly condemned the plan. Federated Farmers, the industry’s main lobby group, said the plan would “rip the guts out of small town New Zealand” and see farms replaced with trees.

    Federated Farmers President Andrew Hoggard said farmers had been trying to work with the government for more than two years on an emissions reduction plan that wouldn’t decrease food production.

    “Our plan was to keep farmers farming,” Hoggard said. Instead, he said farmers would be raising prices “so fast you won’t even hear the dogs barking on the back of the ute (pickup truck) as they drive off.”

    Opposition lawmakers from the conservative ACT Party said the plan would actually increase worldwide emissions by moving farming to other countries that were less efficient at making food.

    New Zealand’s farming industry is vital to its economy. Dairy products, including those used to make infant formula in China, are the nation’s largest export earner.

    There are just 5 million people in New Zealand but some 10 million beef and dairy cattle and 26 million sheep.

    The outsized industry has made New Zealand unusual in that about half of its greenhouse gas emissions come from farms. Farm animals produce gasses that warm the planet, particularly methane from cattle burping and nitrous oxide from their urine.

    The government has pledged to reduce greenhouse gas emissions and make the country carbon neutral by 2050. Part of that plan includes a pledge that it will reduce methane emissions from farm animals by 10% by 2030 and by up to 47% by 2050.

    Under the government’s proposed plan, farmers would start to pay for emissions in 2025, with the pricing yet to be finalized.

    Prime Minister Jacinda Ardern said all the money collected from the proposed farm levy would be put back into the industry to fund new technology, research and incentive payments for farmers.

    “New Zealand’s farmers are set to be the first in the world to reduce agricultural emissions, positioning our biggest export market for the competitive advantage that brings in a world increasingly discerning about the provenance of their food,” Ardern said.

    Agriculture Minister Damien O’Connor said it was an exciting opportunity for New Zealand and its farmers.

    “Farmers are already experiencing the impact of climate change with more regular drought and flooding,” O’Connor said. “Taking the lead on agricultural emissions is both good for the environment and our economy.”

    The liberal Labour government’s proposal harks back to a similar but unsuccessful proposal made by a previous Labour government in 2003 to tax farm animals for their methane emissions.

    Farmers back then also vehemently opposed the idea, and political opponents ridiculed it as a “fart tax” — although a “burp tax” would have been more technically accurate as most of the methane emissions come from belching. The government eventually abandoned the plan.

    According to opinion polls, Ardern’s Labour Party has slipped in popularity and fallen behind the main opposition National Party since Ardern won a second term in 2020 in a landslide victory of historic proportions.

    If Ardern’s government can’t find agreement on the proposal with farmers, who have considerable political sway in New Zealand, it’s likely to make it more difficult for Ardern to win reelection next year when the nation goes back to the polls.

  • Economic Calendar: Oct 10 – Oct 14

    Economic Calendar: Oct 10 – Oct 14

    Monday October 10

    China yuan financing, M2 money supply.

    Canadian markets closed for Thanksgiving day. U.S. stock markets are open, but bond markets are closed for Columbus day.

    Tuesday October 11

    UK September payrolls; Italy August industrial production

    (6 am ET) NFIB Small Business Economic Trends Survey

    Wednesday October 12

    Japan machine orders for August.

    UK real GDP for August, services index, industrial production, manufacturing production and trade deficit.

    (7 am ET) U.S. mortgage applications

    (830 am ET) U.S. Producer Price Index for September. Consensus is for a 0.3% rise month over month.

    (2pm ET) FOMC Minutes from September 20-21 meeting

    Two-day G20 finance ministers and central bank governors meeting in Washington begins.

    Earnings include: PepsiCo Inc.

    Thursday October 13

    China trade surplus for September

    Germany CPI for September

    (830 am ET) U.S. initial jobless claims for week ended Oct. 8.

    (830 am. ET) U.S. consumer prices for September. Consensus is for a monthly rise of 0.2%, or 8.1% from a year ago, slowing from an 8.3% pace a month earlier. Excluding food and energy, CPI is expected to rise 0.4%, or 6.5% year over year – faster than August’s 6.3% rise.

    Earnings include: Aritzia Inc.; BlackRock Inc.; Delta Air Lines Inc.; Domino’s Pizza Inc.; Progressive Corp.; Walgreens Boot Alliance Inc.

    Friday October 14

    China CPI and PPI for September.

    Euro area trade deficit for August. France CPI for September.

    (830 am ET) Canada manufacturing sales for August. Consensus is for a decline of 1.2%.

    (830 am ET) Canada wholesale trade for August.

    (9 am ET) Canada existing home sales for September. It’s expected to decline 32% from a year earlier, with average prices down 6%.

    (9am ET) MLS Home Price Index for September. It’s expected to be up 2.5% year over year.

    (830 am ET) U.S. retail sales for September. Consensus is a monthly rise of 0.2%, or down 0.1% when excluding autos.

    (830 am ET) U.S. import prices. Consensus is for a year over year rise of 6.1%, slowing from August’s pace of 7.8%.

    (10 am ET) U.S. business inventories for August.

    (10 am ET) U.S. University of Michigan Consumer Sentiment for October. It’s forecast to come in at 58.8, up slightly from September’s 58.6.

    Earnings include: Citigroup Inc.; JPMorgan Chase & Co.; Morgan Stanley; PNC Financial Services Group Inc.; UnitedHealth Group Inc.; U.S. Bancorp; Wells Fargo & Co.

  • EU countries to seek November deal on more emergency measures in bid to tackle high gas prices

    EU countries to seek November deal on more emergency measures in bid to tackle high gas prices

    European Union countries will seek a November deal on more emergency measures to tackle high gas prices, officials said, although countries still disagree on what form those measures would take and whether they should cap gas prices.

    As Europe heads into a winter of scarce Russian gas supplies and high energy costs, EU energy ministers will meet in Prague on Wednesday to discuss their next move, having already rushed through emergency EU energy windfall profit levies, gas storage filling obligations and electricity demand curbs.

    A majority of EU states say a gas price cap should come next, but disagree on whether it should apply to all gas trades, long-term contracts, or just gas used to produce electricity. Others, including Germany, remain opposed.

    A senior EU official said Wednesday’s meeting should narrow down the options so the European Commission can propose fresh legislation this month.

    “Member states use the same words, not necessarily in the same meaning, so we need to narrow that down,” the official said.

    Ministers on Wednesday will also discuss joint gas buying among countries, and the potential to negotiate lower prices with non-Russian suppliers as ways for the EU to tame energy prices.

    The Czech Republic, which currently chairs meetings of EU ministers, would call an emergency energy ministers’ meeting in November to approve the proposals, the official said.

    Three EU country officials agreed with that timeline, but said states still disagree on what measures to take. “It’s difficult to see consensus because everyone has their own preferences,” one said.

    The senior EU official said that in their view countries were leaning toward the “Iberian model” of capping the price of gas used for power generation.

    Spain and Portugal capped the price of gas used in power generation in June, which has helped curb local power prices. The idea has gained traction among other countries, although some worry it could raise EU gas demand, since Spain’s gas use increased under the measure.

    EU energy commissioner Kadri Simson last week said Brussels could learn from the scheme, but that it was not suitable to immediately roll out across the continent because of local specificities including Iberia’s numerous liquefied natural gas terminals, which many EU countries lack.

    Countries would also need to decide how to compensate gas plants for the gap between the capped price and the higher market price at which they buy fuel, be it through public funding or a levy on other energy generators.

    “It would be really costly for many member states,” one of the officials said.

  • Oil slips as recession fears outweigh tight supply prospects

    Oil slips as recession fears outweigh tight supply prospects

    Oil prices edged lower on Monday as investors weighed economic storm clouds that could foreshadow a global recession, and erode fuel demand, against potentially tighter supply.

    Brent crude futures fell 69 cents, or 0.7%, to $97.23 a barrel. West Texas Intermediate crude declined by 36 cents, or 0.4%, to $92.57 a barrel.

    U.S. Federal Reserve Chicago President Charles Evans said there was a strong consensus at the Fed to raise the target policy rate to around 4.5% by March and hold it there.

    Stubbornly higher rates, which are aimed at giving the U.S. central bank time to evaluate the impact of inflation and allow clogged supply chains to clear, limited oil prices.

    “There’s more of the doom and gloom from those folks and what they’re going to do to the economy, because they’re not so convinced they have inflation under control, and that’s the macro play that’s weighing on oil,” said John Kilduff, partner at Again Capital LLC in New York.

    Oil prices also struggled under a strengthening U.S. dollar , which rose for a fourth session. A stronger dollar makes crude more expensive for non-American buyers.

    The prospect of tightening OPEC+ oil supplies limited declines in prices. But signs that the group’s de facto leader, Saudi Arabia, would continue to serve Asian customers at full levels lowered expectations of the cuts’ impact. 

    Saudi Aramco has told at least seven customers in Asia they will receive full contract volumes of crude oil in November ahead of the peak winter season, several sources with knowledge of the matter said.

    The Organization of the Petroleum Exporting Countries and allies including Russia, together known as OPEC+, decided last week to lower their output target by 2 million barrels per day.

    Brent and WTI posted their biggest weekly percentage gains since March after the reduction was announced.

    However, the cut has spurred a flurry of activity in the options market – but with more U.S. bettors opting for a bearish stance, data from CME Group showed.

    Concerns over still relatively robust demand as the pandemic has eased meeting potentially scarce supply have been deepened as the European Union late last week endorsed a G7 plan to impose a price cap on Russian oil exports.

    The complicated new sanctions package could end up shutting in considerable supplies of Russia crude, analysts have warned.

    “A recessionary economic outlook will lead to lower oil demand,” Fitch Ratings said on Monday. “However, we expect pricing volatility to remain high in the short term as geopolitical factors, such as further sanctions leading to a reduction in Russian exports.”

    Those political factors could alter supply patters and cause greater price volatility, Fitch said.

    Meanwhile, services activity in China during September contracted for the first time in four months as COVID-19 restrictions hit demand and business confidence, data showed on Saturday.

    The slowdown in China, the world’s second-largest oil consumer behind the United States, adds to growing concerns over a possible global recession triggered by numerous central banks raising interest rates to combat high inflation.

  • Taiwan stocks down 3% in mixed Asia trade as TSMC plunges 6%

    Taiwan stocks down 3% in mixed Asia trade as TSMC plunges 6%

    Shares in the Asia-Pacific were mixed on Tuesday, while Taiwan’s benchmark index dropped more than 3% on its return to trade as investors weighed the impact of new U.S. rules on chipmaker TSMC.

    Japan and South Korea’s markets also resumed trading after a holiday on Monday. The Nikkei 225 fell around 2% and the Topix lost about 1.5%. In South Korea, the Kospi fell 2.16% and the Kosdaq shed 3.5%.

    Hong Kong’s Hang Seng index fell 0.91% and the Hang Seng Tech index dropped 1.11%. The Shanghai Composite and Shenzhen Component in mainland China were little changed.

    In Australia, the S&P/ASX 200 bucked the overall trend and was 0.27% higher. MSCI’s broadest index of Asia-Pacific shares outside Japan dipped 1.41%.

    “Equities continue to sell off as the impact of tighter monetary policy spooks investors,” ANZ Research analysts wrote in a note Tuesday.

    https://www.cnbc.com/2022/10/11/asia-markets-interest-rates-economy-stocks-currencies.html

  • Happy Thanksgiving

    Happy Thanksgiving

  • France’s Emmanuel Macron criticizes Biden’s ‘Armageddon’ warning: We must ‘speak with prudence’

    France’s Emmanuel Macron criticizes Biden’s ‘Armageddon’ warning: We must ‘speak with prudence’

    French President Emmanuel Macron criticized President Biden’s comments warning of “Armageddon” as Russia invokes the potential for using nuclear weapons.

    Biden made the comments during a speech to the Democratic Senatorial Campaign Committee on Thursday night, stating that Russian President Vladimir Putin isn’t joking when it comes to using weapons of mass destruction.

    “[Putin was] not joking when he talks about the use of tactical nuclear weapons or biological or chemical weapons,” Biden said. “We have not faced the prospect of Armageddon since Kennedy and the Cuban Missile Crisis.”

    Gold drops as U.S. jobs data fans hefty Fed rate-hike bets (cnbc.com)

  • Gold drops as U.S. jobs data fans hefty Fed rate-hike bets

    Gold drops as U.S. jobs data fans hefty Fed rate-hike bets

    Gold prices fell Friday after a better-than-expected U.S. jobs report cemented expectations the Federal Reserve would implement steep interest rate hikes and lifted the dollar and bond yields.

    Spot gold was down 0.9% at $1,695.40 per ounce. Prices have risen about 2% so far this week.

    U.S. gold futures slipped 1% to $1,703.40.

    “The market is looking at the stronger-than-expected payrolls report as further impetus for the Fed to raise yet another 75 bps at the early November meeting,” said Tai Wong, a senior trader at Heraeus Precious Metals in New York.

    “If bullion doesn’t hold support at $1,690, it could retest $1,660 level. Market will be now be focused on key inflation data next week, as well as the Fed minutes.”

    Data showed U.S. employers hired more workers than expected in September, while the unemployment rate dropped to 3.5%.

    Fed fund futures are now pricing in a 92% chance of a 75-basis-point (bps) rate hike by the U.S. central bank at its policy meeting next month after a strong labor market report.

    Gold is highly sensitive to rising U.S. interest rates, as these increase the opportunity cost of holding non-yielding bullion, while boosting the dollar, in which it is priced.

    Following the data, the dollar jumped 0.3% against its rivals, making gold more expensive for other currency holders. Benchmark U.S. Treasury yields also climbed.

    Silver eased 2.7% to $20.10 per ounce, but was on track for its biggest weekly rise since late-July, up about 6.5% so far.

    Platinum lost 1.1% to $912.07 per ounce and was headed for its best week since February 2021. Palladium dipped 3.1% to $2,190.78.