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Key Events This Week: First Post-War PMIs And Deluge Of Fed Speakers

Key Events This Week: First Post-War PMIs And Deluge Of Fed Speakers

It’s a relatively quieter week compared to the last week’s central bank/quad-witching…

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Key Events This Week: First Post-War PMIs And Deluge Of Fed Speakers

It's a relatively quieter week compared to the last week's central bank/quad-witching emotional rollercoaster (if that is possible at a time when the Second Cold War has broken out) and one of the key events this week according to DB's Jim Reid will be Thursday’s March flash PMIs from around the world where we’ll see the first impact of the Russia/Ukraine conflict on activity, especially in Europe.

Outside of that, UK CPI data on Wednesday is going to be very interesting after the BoE warned on both growth and inflation last week in their surprisingly dovish hike. See our UK economist’s review here. There is also the Spring UK (Budget) Statement on Wednesday (preview here) where all things fiscal will be in focus.

Wednesday's new home sales, Friday's pending home sales and Thursday's durable goods are the main economic releases in the US.  The week's key evon events are summarized in the table below:

There's also plenty of Fed speak to sharpen up the message from last week's FOMC but don't expect a chorus line singing from the same song sheet. The dot plot showed the range of YE '22 Fed funds rates, as forecast by the committee, was a historically wide 1.4% to 3.1%. Boston (non-voter hawk) and Chair Powell himself are up today with the latter also on the docket on Wednesday. Williams (dove) will be on a panel tomorrow but also gives a speech on Friday. Daly (non-voter / dove) speaks tomorrow, Wednesday and Friday. Mester (voter / hawk) speaks tomorrow. Bullard (voter / hawk) is up on Wednesday and remember he was the lone 50bps dissenter last week. Kashkari (non-voter / dove), Governor Waller (hawk) and Chicago President Evans (non-voter / dove) speak on Thursday. Barkin (non-voter / hawk) concludes the Fed's business for the week on Friday.

Here is a day-by-day calendar of events, courtesy of Deutsche Bank

Monday March 21

  • Data: Germany PPI
  • Central banks: PBoC announces 1 and 5-year loan prime rates, ECB's Lagarde, Nagel, Makhlouf speak, Fed’s Powell and Bostic speak
  • Earnings: Nike, Pinduoduo

Tuesday March 22

  • Data: Eurozone construction output, US Richmond Fed manufacturing index, Canada industrial product price
  • Central banks: ECB's Lagarde, Guindos, Villeroy, Lane and Panetta speak, BoE's Cunliffe speaks, Fed’s Williams, Daly and Mester speak
  • Earnings: Carnival, Adobe, Xiaomi, Foxconn

Wednesday March 23

  • Data: UK CPI, RPI, house price index, Eurozone consumer confidence, US new home sales
  • Central banks: BoJ minutes of January meeting, BoE Governor Bailey speaks, ECB's Lagarde, Nagel speak, Fed’s Powell, Daly, Bullard speak
  • Earnings: Tencent, Cintas, China Mobile, General Mills
  • Other: UK Chancellor's budget statement

Thursday March 24

  • Data: Japan, France, Germany, Eurozone, UK, US PMIs, Japan PPI services, US initial jobless claims, durable goods orders
  • Central banks: ECB publishes economic bulletin, ECB's Elderson speaks, BoE's Mann speaks, Fed’s Bullard, Bostic, Kashkari, Waller speak
  • Earnings: Daimler
  • Other: BoE financial policy committee report

Friday March 25

  • Data: UK GfK consumer confidence, retail sales, Germany IFO business climate, Italy consumer confidence index, manufacturing confidence, economic sentiment, Eurozone M3
  • Central Banks: Fed’s Daly, Waller, Williams and Barkin speak

***

Finally, looking at just the US, Goldman writes that the key economic data release this week is the durable goods report on Thursday. There are several scheduled speaking engagements by Fed officials this week, including remarks by Chair Powell on Monday and Wednesday, and remarks by New York Fed President Williams on Tuesday and Friday.

Monday, March 21

  • There are no major economic data releases scheduled.
  • 08:00 AM Atlanta Fed President Bostic (FOMC non-voter) speaks: Atlanta Fed President Raphael Bostic will give a speech at the annual National Association for Business Economics economic policy conference. Text and audience and media Q&A are expected. In his last public appearance, on March 1st, President Bostic argued that the Fed “[does] not need to have [its] policy in a maximally accommodative stance,” and noted that, “for the rest of 2022, we will be hard pressed to get inflation below 3%.” In earlier remarks, President Bostic noted that “to the extent we start to see [monthly sequential inflation] trend down, then I will be comfortable pretty much with a 25 basis-point move. If that continues to persist at elevated levels, or even moves in the other direction, then I am really going to have to look at a 50-basis-point move for March.” Since then, the FOMC hiked by 25bp for the first time since the pandemic began at last week’s March meeting, and the March Summary of Economic Projections delivered a hawkish message by showing a median of seven hikes for 2022 and an above-neutral terminal rate of 2.75%.
  • 12:00 PM Fed Chair Powell (FOMC voter) speaks: Fed Chair Jerome Powell will give a speech at the annual NABE economic policy conference. Text and moderated Q&A are expected. Following last week’s FOMC meeting, Chair Powell reinforced the Committee’s hawkish tone by stressing that hiking by 50bp was “certainly a possibility,” that the FOMC will be “attentive to the risks of further upward pressure on inflation and inflation expectations,” and that he sees the risk of recession as “not particularly elevated.” We continue to expect the Fed to hike seven times in 2022. Chair Powell also said that the FOMC could finalize and implement its plan for balance-sheet reduction “as soon as our next meeting in May.” We see this as a strong hint and now expect the FOMC to announce the start of balance sheet reduction in May (vs. June previously).

Tuesday, March 22

  • 10:00 AM Richmond Fed manufacturing index, March (consensus +2, last +1)
  • 10:35 AM New York Fed President Williams (FOMC voter) speaks: New York Fed President John Williams will take part in a virtual panel discussion hosted by the Bank for International Settlements. Moderated Q&A is expected. In his last public appearance, on March 3rd, President Williams noted that “it’s clear with inflation so high that we need to get monetary policy away from where we are today,” and that the FOMC has “the ability to adjust interest rates higher” if inflation is more persistent than expected. In earlier remarks, on February 18th, President Williams stated that he did not “see any compelling argument to take a big step at the beginning [of the hiking cycle].”
  • 02:00 PM San Francisco Fed President Daly (FOMC non-voter) speaks: San Francisco Fed President Mary Daly will take part in a virtual panel discussion hosted by the Hamilton Project at the Brookings Institution. On February 23rd President Daly argued that “inflation is well above our price stability goal and the lesson from the 1970s is we need to demonstrate to the American people that we’re committed to having that not be a perpetuating spiral,” but cautioned that while the FOMC has to “get policy in line … [it] can’t be impatient about doing it all today.” On February 24th, President Daly said that the FOMC needs to “ensure that we don’t make adjustments to the balance sheet at each and every meeting, because we just don’t know enough about it to make it a surgical tool.”
  • 05:00 PM Cleveland Fed President Mester (FOMC voter) speaks: Cleveland Fed President Loretta Mester will discuss the economy and monetary policy at an event hosted by John Carroll University in Ohio. Text and audience Q&A are expected. In her last public appearance, on March 3rd, President Mester stated that “starting with [a] 25[bp hike] followed by further increases in coming months I think puts us in a good position,” but signaled she was open to a faster hiking pace, noting that “if by the middle of the year … we don’t see inflation moving back down, that would be a signal to me that we have to remove accommodation at a stronger pace, at a faster pace, because inflation isn’t moving down as we expected.” President Mester also indicated that “it could very well be that interest rates will have to move up above that long-run level.”

Wednesday, March 23

  • 08:00 AM Fed Chair Powell (FOMC voter) speaks: Fed Chair Jerome Powell will take part in a panel discussion on challenges for central banks in a digital world hosted by the Bank for International Settlements. Moderated Q&A is expected.
  • 10:00 AM New home sales, February (GS -1.0%, consensus +1.3%, last -4.5%): We estimate that new home sales declined 1.0% in February, following a 4.5% decline in January.
  • 11:45 AM San Francisco Fed President Daly (FOMC non-voter) speaks: San Francisco Fed President Mary Daly will take part in a moderated discussion at the Bloomberg Equality Summit in New York.
  • 03:00 PM St. Louis Fed President Bullard (FOMC voter) speaks: St. Louis Fed President James Bullard will take part in a moderated discussion on the economic outlook at an event hosted by the Mid-Sized Bank Coalition of America. Audience Q&A is expected. President Bullard dissented from the FOMC’s decision to raise the federal funds rate by 25bp to 0.25%-0.50% in March, arguing that “raising the target range to 0.50% to 0.75% and implementing a plan for reducing the size of the Fed’s balance sheet would have been more appropriate actions.” President Bullard also argued that the FOMC should “try to achieve a level of the policy rate above 3% this year.”
  • 09:05 PM St. Louis Fed President Bullard (FOMC voter) speaks: St. Louis Fed President James Bullard will take part in a moderated discussion on the economic outlook at a virtual conference in Hong Kong.

Thursday, March 24

  • 08:30 AM Initial jobless claims, week ended March 19 (GS 220k, consensus 211k, last 214k); Continuing jobless claims, week ended March 12 (consensus 1,400k, last 1,419k): We estimate initial jobless claims edged up to 220k in the week ended March 19.
  • 08:30 AM Current account balance, Q4 (consensus -$218.0bn, last -$214.8bn)
  • 08:30 AM Durable goods orders, February preliminary (GS -0.5%, consensus -0.6%, last +1.6%); Durable goods orders ex-transportation, February preliminary (GS +1.2%, consensus +0.5%, last +0.7%); Core capital goods orders, February preliminary (GS +1.2%, consensus +0.5%, last +1.0%); Core capital goods shipments, February preliminary (GS +1.0%, consensus +0.5%, last +1.9%): We estimate durable goods orders pulled back 0.5% in the preliminary February report, reflecting fewer commercial aircraft orders. However, we also expect strong gains in core capital goods orders (+1.2%) and core capital goods shipments (+1.0%), reflecting strong goods demand, higher prices, and the 2.0% rebound in industrial production of business equipment. We are not assuming a significant drag from the Russian invasion of Ukraine on February 24, as Russia accounts for only 0.4% of goods exports and 0.6% of machinery and computer exports.
  • 08:30 AM Minneapolis Fed President Kashkari (FOMC non-voter) speaks: Minneapolis Fed President Neel Kashkari will speak at the Midwest Economic Outlook Summit, hosted by the Fargo-Moorhead Chamber of Commerce. Audience Q&A is expected. In an essay published on Friday, President Kashkari noted that “if … high inflation … [proves] transitory …, then I believe the FOMC will need to remove accommodation and get modestly above neutral [of 2%] while the inflationary dynamics unwind. However, if … the economy is in a high-pressure, high-inflation equilibrium, then the FOMC will need to act more aggressively and bring policy to a contractionary stance in order to move the economy back to an equilibrium consistent with our 2 percent inflation target.” President Kashkari also noted that high levels of household income and large state-government budget surpluses suggested that “inflation may be sustained and in fact might not be transitory.” In a public appearance later on Friday, President Kashkari stated that he was “in favor of beginning to shrink the balance sheet soon, I mean as early as the next meeting,” and suggested “a much faster pace [of balance-sheet reduction],” noting that “if I had to pick a number I’d say shrink the balance sheet at roughly double the pace that we did last time.” We expect the Fed will start the process of balance-sheet normalization in May at a pace of $100bn per month, which is double the last cycle’s pace.
  • 09:10 AM Fed Governor President Waller (FOMC voter) speaks: Fed Governor Christopher Waller will discuss the housing market at a virtual event hosted by Tel Aviv University and Rutgers University. Text and moderated Q&A are expected. In an interview on Friday, Governor Waller noted that “the data is screaming at us to go 50 [basis points] but the geopolitical events were telling you to go forward with caution, … so those two factors combined pushed me off of advocating for a 50 basis-point hike at this meeting and supporting the 25 [basis-point] hike.” Governor Waller stated that he favors “front-loading our rate hikes,” and that “the way to front-load it is to pull some rate hikes forward, which would imply 50 basis points at one or multiple meetings in the near future.”
  • 09:45 AM S&P Global US manufacturing PMI, March preliminary (consensus 56.5, last 57.3): S&P Global US services PMI, March preliminary (consensus 54.2, last 55.9)
  • 09:50 AM Chicago Fed President Evans (FOMC non-voter) speaks: Chicago Fed President Charles Evans will discuss the outlook for the economy and monetary policy at an event hosted by the Detroit Regional Chamber. Text and media Q&A are expected. In an interview on March 4th, President Evans argued that the FOMC needs “to be moving towards a more neutral monetary policy certainly by the end of the year so that we’re within striking distance of taking a position that would deal more forcefully with inflation if that’s necessary. I don’t quite think that’s necessary, but I have to say we need to be positioned for that.”
  • 11:00 AM Kansas City Fed manufacturing index, March (consensus +21, last +29)
  • 11:00 AM Atlanta Fed President Bostic (FOMC non-voter) speaks: Atlanta Fed President Raphael Bostic will take part in a virtual discussion hosted by Spelman College. Audience Q&A is expected.

Friday, March 25

  • 09:10 AM Fed Governor President Waller (FOMC voter) speaks: Fed Governor Christopher Waller will discuss central bank digital currencies at a virtual event hosted by Rutgers University. Moderated Q&A is expected.
  • 10:00 AM Pending home sales, February (GS -3.5%, consensus +1.0%, last -5.7%): We estimate that pending home sales decreased by 3.5% in February, following a 5.7% decrease in January.
  • 10:00 AM University of Michigan consumer sentiment, March final (GS 59.4, consensus 59.7, last 59.7); We expect the University of Michigan consumer sentiment index decreased by 0.3pt to 59.4 in the final March reading.
  • 10:00 AM New York Fed President Williams (FOMC voter) speaks: New York Fed President John Williams will discuss monetary policy and financial stability during a virtual panel hosted by the Central Bank of Peru and the Bank for International Settlements. Text and moderated Q&A are expected.
  • 11:30 AM Richmond Fed President Barkin (FOMC non-voter) speaks:  Richmond Fed President Thomas Barkin will give a speech on inflation at an event hosted by The Citadel Director’s Institute in Charleston, South Carolina. President Barkin wrote on Friday that the FOMC has “moved at a 50-basis point clip in the past, and we certainly could do so again if we start to believe that is necessary to prevent inflation expectations from unanchoring,” but noted that “setting the right pace for rate increases is a balancing act — we normalize rates to contain inflation, but if we overcorrect, we can negatively impact employment, which is the other part of our dual mandate.” President Barkin stressed that “while [the FOMC] could move faster, [it is] already having more impact than you might think” through its effect on financial conditions.
  • San Francisco Fed President Daly (FOMC non-voter) speaks (time to be announced): San Francisco Fed President Mary Daly will deliver opening remarks at the San Francisco Fed's Macroeconomic and Monetary Policy conference.

Source: Deutsche Bank, Bank of America, Goldman Sachs

Tyler Durden Mon, 03/21/2022 - 09:54

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Economics

After a near 10% rally this week can the Netflix share price make a comeback?

The Netflix share price rallied by nearly 10% (9.6%) this week after co-CEO Ted Sarandos confirmed the film and television streaming market leader is to…

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The Netflix share price rallied by nearly 10% (9.6%) this week after co-CEO Ted Sarandos confirmed the film and television streaming market leader is to introduce a new ad-supported, cheaper subscription. The company also announced it is to lay off another 300 employees, around 4% of its global workforce, in addition to the 150 redundancies last month.

Netflix has been forced into a period of belt-tightening after announcing a 200,000 subscriber-strong net loss over the first quarter of 2022. The U.S. tech giant also ominously forecast expectations for the loss of a further 2 million subscribers over the current quarter that will conclude at the end of this month.

netflix inc

The company has faced increasing sector competition with Paramount+ its latest new rival, joining Amazon Prime, Disney+, HBO Max and a handful of other new streaming platforms jostling for market share. A more competitive environment has combined with a hangover from the subscriber boom Netflix benefitted from over the Covid-19 pandemic and spiralling cost of living crisis.

Despite the strong gains of the past week, Netflix’s share price is still down over 68% for 2022 and 64% in the last 12 months. Stock markets have generally suffered this year with investors switching into risk-off mode in the face of spiralling inflation, rising interest rates, fears of a recession and the geopolitical crisis triggered by Russia’s invasion of Ukraine.

Growth stocks like Netflix whose high valuations were heavily reliant on the value of future revenues have been hit hardest. No recognised member of Wall Street’s Big Tech cabal has escaped punishment this year with even the hugely profitable Apple, Microsoft, Alphabet and Amazon all seeing their valuations slide by between around 20% and 30%.

But all of those other tech companies have diversified revenue streams, bank profits which dwarf those of Netflix and are sitting on huge cash piles. The more narrowly focused Meta Platforms (Facebook, WhatsApp and Instagram) which still relies exclusively on ad revenue generated from online advertising on its social media platforms, has also been hit harder, losing half of its value this year.

But among Wall Street’s established, profitable Big Tech stocks, Netflix has suffered the steepest fall in its valuation. But it is still profitable, even if it has taken on significant debt investing in its original content catalogue. And it is still the international market leader by a distance in a growing content streaming market.

justwatch

Source: JustWatch

Even if the competition is hotting up, Netflix still offers subscribers by far the biggest and most diversified catalogue of film and television content available on the market. And the overall value of the video content streaming market is also expected to keep growing strongly for the next several years. Even if annual growth is forecast to drop into the high single figures in future years.

revenue growth

Source: Statista

In that context, there are numerous analysts to have been left with the feeling that while the Netflix share price may well have been over-inflated during the pandemic and due a correction, it has been over-sold. Which could make the stock attractive at its current price of $190.85, compared to the record high of $690.31 reached as recently as October last year.

What’s next for the Netflix share price?

As a company, Netflix is faced with a transition period over the next few years. For the past decade, it has been a high growth company with investors focused on subscriber numbers. The recent dip notwithstanding, it has done exceedingly well on that score, attracting around 220 million paying customers globally.

Netflix established its market-leading position by investing heavily in its content catalogue, first by buying up the rights to popular television shows and films and then pouring hundreds of millions into exclusive content. That investment was necessary to establish a market leading position against its historical rivals Amazon Prime, which benefits from the deeper pockets of its parent company, and Hulu in the USA.

Netflix’s investment in its own exclusive content catalogue also helped compensate for the loss of popular shows like The Office, The Simpsons and Friends. When deals for the rights to these shows and many hit films have ended over the past few years their owners have chosen not to resell them to Netflix. Mainly because they planned or had already launched rival streaming services like Disney+ (The Simpsons) and HBO Max (The Office and Friends).

Netflix will continue to show third party content it acquires the rights to. But with the bulk of the most popular legacy television and film shows now available exclusively on competitor platforms launched by or otherwise associated with rights holders, it will rely ever more heavily on its own exclusive content.

That means continued investment, the expected budget for this year is $17 billion, which will put a strain on profitability. But most analysts expect the company to continue to be a major player in the video streaming sector.

Its strategy to invest in localised content produced specifically for international markets has proven a good one. It has strengthened its offering on big international markets like Japan, South Korea, India and Brazil compared to rivals that exclusively offer English-language content produced with an American audience in mind.

The approach has also produced some of Netflix’s biggest hits across international audiences, like the South Korean dystopian thriller Squid Games and the film Parasite, another Korean production that won the 2020 Academy Award for best picture – the first ever ‘made for streaming’ movie to do so.

Netflix is also, like many of its streaming platform rivals, making a push into sport. It has just lost out to Disney-owned ESPN, the current rights holder, in a bid to acquire the F1 rights for the USA. But having made one big move for prestigious sports rights, even if it ultimately failed, it signals a shift in strategy for a company that hasn’t previously shown an interest in competing for sports audiences.

Over the next year or so, Netflix’s share price is likely to be most influenced by the success of its launch of the planned lower-cost ad-supported subscription. It’s a big call that reverses the trend of the last decade away from linear television programming supported by ad revenue in its pursuit of new growth.

It will take Netflix at least a year or two to roll out a new ad-supported platform globally and in the meanwhile, especially if its forecast of losing another 2 million subscribers this quarter turns out to be accurate, the share price could potentially face further pain. But there is also a suspicion that the stock has generally been oversold and will eventually reclaim some of the huge losses of the past several months.

How much of that loss of share price is reclaimed will most probably rely on take-up of the new ad-supported cheaper membership tier. There is huge potential there with the company estimating around 100 million viewers have been accessing the platform via shared passwords. That’s been clamped down on recently and will continue to be because Netflix is determined to monetise those 100 million viewers contributing nothing to its revenues.

If a big enough chunk of them opt for continued access at the cost of watching ads, the company’s revenue growth could quickly return to healthy levels again. And that could see some strong upside for the Netflix share price in the context of its currently deflated level.

The post After a near 10% rally this week can the Netflix share price make a comeback? first appeared on Trading and Investment News.

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Aura High Yield SME Fund: Letter to Investors 24 June 2022

The RBA delivered a speech this week indicating faster monetary policy tightening is to come in the near-term with the aim of curbing the rate of inflation….

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The RBA delivered a speech this week indicating faster monetary policy tightening is to come in the near-term with the aim of curbing the rate of inflation.

Inflation and Monetary Policy 1,2

This week, RBA Governor Philip Lowe spoke about the department’s monetary policy intervention to tackle inflation in the evolving economic environment. Over the last six months, similar factors have continued to put pressure on food and energy prices – namely the war in Ukraine, foods on the East coast, and Covid lockdowns in China. The ongoing lockdowns in China are causing disruptions in manufacturing and production and supply chains coupled with strong global demand that is unable to be met. These pressures have forced households and businesses to absorb the rising cost of living.

To demonstrate the rise, the RBA reporting this week on Business Conditions and Sentiments saw:

  • Almost a third of all businesses (31 per cent) have difficulty finding suitable staff;
  • Nearly half (46 per cent) of all businesses have experienced increased operating expenses; and
  • More than two in five businesses (41 per cent) face supply chain disruptions, which has remained steady since it peaked in January 2022 (47 per cent).

* The Survey of Business Conditions and Sentiments was not conducted between July 2021 to December 2021 (inclusive)

Inflation is being experienced globally, although Australia remains below that of most other advanced economies sitting at 5.1 per cent. The share of items in the CPI basket with annualised price increases of more than 3 per cent is at the highest level since 1990 as displayed in the graph below.

With additional information on leading indicators now on hand, the RBA has pushed their inflation forecast up from 6 to 7 per cent for the December quarter, due to persistently high petrol and energy prices. After this period, the RBA expects inflation will begin to decline.

We are beginning to see pandemic-related supply side issues resolve, with delivery times shortening slightly and businesses finding alternative solutions for global production and logistic networks. Whilst there is still a way to go in normalising the flow in the supply side and the possibility that further disruptions and setbacks could occur, the global production system is adapting accordingly, which should help alleviate some of the inflationary pressures.

The RBA’s goal is to ensure inflation returns to a 2-3 per cent target range over time, with the view that high inflation causes damage to the economy, reduces people’s purchasing power and devalues people’s savings.

Household Wealth 3

Growth of 1.2 per cent in household wealth, equivalent to $173 billion, was reported in the March quarter. The rise was a result of an increase in housing prices in the March quarter. Prices have started reversing since that read.

Demand for credit also boomed, with a record total demand for credit of $218.8 billion for the March quarter. The rise was driven by private non-financial corporations demanding $153.2 billion, while households and government borrowed $41.9 billion and $17.5 billion respectively. 

We will likely see a significant shift in household wealth and credit demand in next quarter’s report given the rising interest rate environment, depressed household valuations and elevated pricing pressures. 

Portfolio Management Commentary

A lag in leading economic indicators has shifted the RBA’s outlook, with an increase in the expected level of inflation to peak at 7 per cent and rate rises to come harder and faster in the near term. From a portfolio standpoint we are not seeing any degradation in our underlying portfolio and open dialogue with our lenders has us confident in their borrowing base. We are maintaining a close eye on the economic environment to ensure we maintain the performance of our Fund and ensure our lenders are in a position to maintain performance and strive to capitalise off the back of economic shifts.

1 RBA Inflation and Monetary Policy Speech – 21 June 2022

2 RBA Inflation and Monetary Policy Speech – 21 June 2022

3 Australian National Accounts: Finance and Wealth

You can learn more about the Aura High Yield SME Fund here.

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The Sussex researchers who used international collaboration and 3D printing to stem PPE shortages in Nigeria

Researchers at the University of Sussex and their partners in Nigeria used open-source designs and 3D printing to reduce personal protective equipment…

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Researchers at the University of Sussex and their partners in Nigeria used open-source designs and 3D printing to reduce personal protective equipment (PPE) shortages for a community in Nigeria during the Covid-19 pandemic – tells a recently published academic paper.

Credit: Please credit Royhaan Folarin, TReND

Researchers at the University of Sussex and their partners in Nigeria used open-source designs and 3D printing to reduce personal protective equipment (PPE) shortages for a community in Nigeria during the Covid-19 pandemic – tells a recently published academic paper.

In their paper in PLOS Biology, Dr Andre Maia Chagas from the University of Sussex, and Dr. Royhaan Folarin from the Olabisi Onabanjo University (Nigeria), explain how their collaboration led to the production of  over 400 pieces of PPE for the local hospital and surrounding community, including those providing essential and frontline services. This included face masks and face shields, at a time when a global shortage meant it was impossible for these to be sourced by traditional companies. 

In their collaboration, they leveraged existing open-source designs detailing how to manufacture approved PPE. This allowed Nigerian researchers to source, build and use a 3D printer and begin producing and distributing protective equipment for the local community to use. Plus, it was affordable.

One 3D printer operator and one assembler produced on average one face shield in 1 hour 30 minutes, costing 1,200 Naira (£2.38) and one mask in 3 hours 3 minutes costing 2,000 Naira (£3.97). In comparison, at the time of the project, commercially available face shields cost at least 5,000 Naira (£9.92) and reusable masks cost 10,000 Naira (£19.84). 

Dr Maia Chagas, Research Bioengineer at the University of Sussex, said: “Through knowledge sharing, collaboration and technology, we were able to help support a community through a global health crisis. 

“I’m really proud of the tangible difference we made at a critical time for this community. As PPE was in such high demand and stocks were low, prices for surgical masks, respirators and surgical gowns hiked, with issues arising around exports and international distribution. 

“We quickly realized that alternative means of producing and distributing PPE were required. Free and open-source hardware (FOSH) and 3D printing quickly became a viable option.

“We hope that our international collaboration during the pandemic will inspire other innovators to use technology and share knowledge to help address societal problems, which were typically reliant on funding or support from government or large research institutions. 

“With open source designs, knowledge sharing and 3D printing, there is a real opportunity for us to start addressing problems from the ground up, and empower local communities and researchers.”

Dr. Royhaan Folarin, a Neuroscientist and lecturer of anatomical sciences at Olabisi Onabanjo University in Nigeria, said: 

“During the pandemic, we saw the successful printing and donation of PPE in the Czech Republic by Prusa Research and it became a goal for me to use the training I had received in previous TReND in Africa workshops to help impact my immediate community in Nigeria.”

The international collaboration came about as a result of the TReND in Africa network, a charity hosted within Sussex which supports scientific capacity building across Africa. 

After initial use, testers provided feedback commending the innovativeness, usefulness and aesthetics of the PPE and, while the team’s 3D printer was not built for large-scale serial manufacturing, they identified the possibilities for several 3D printers to run in parallel, to reduce relative production time. During the pandemic, this was successfully demonstrated by the company Prusa Research, which produced and shipped 200,000 CE certified face shields. 


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