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Week Ahead – Trump Closing the Gap

Week Ahead – Trump Closing the Gap

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Far From Uneventful

The upcoming week is a little light on the data front but don’t expect it to be uneventful. Donald Trump is closing the gap on Joe Biden two months before the election and the race is hotting up. Meanwhile, the tech sell-off has gripped the markets, putting sharp focus on the sector next week. If that doesn’t do it for you, the ECB meets on Thursday, as speculation mounts about more stimulus this year.

Key Economic Events

Saturday, Sept. 5

-Italian think tank the European House continues its forum in Cernobbio. French Finance Minister Bruno Le Maire, EU Brexit negotiator Michel Barnier, and German Deputy Finance Minister Joerg Kukies are expected to speak

Economic Data:

  • Colombia CPI
  • Australia AiG performance of services index

Sunday, September 6th

-The European House continues its forum in Cernobbio, northern Italy.

Monday, September 7th

-US and Canada celebrate Labor Day. Markets are closed.

– Another face-to-face Brexit discussion between the U.K. and EU occurs in London. The odds are growing for a no-deal split at the end of the Brexit transition period.

Economic Data:

    • Japan official reserve assets
    • Australia ANZ job advertisements, foreign reserves
    • Germany industrial production
    • Singapore foreign reserves
    • Hong Kong foreign reserves
    • South Africa gross and net reserves, consumer confidence
    • China trade, foreign reserves
    • Philippines foreign reserves

Tuesday, September 8th

Economic Data:

      • Australia ANZ Roy Morgan consumer confidence, NAB business conditions
      • Japan labor cash earnings, GDP, BoP, bank lending, Eco Watchers survey outlook, household spending
      • Euro-area GDP, employment
      • South Africa GDP

Wednesday, September 9th

-US China Economic and Security Review Commission holds an online public hearing to evaluate key developments in China’s economy, military capabilities, and U.S. relations during 2020.

-The Bank of Canada is expected to keep its overnight rate target unchanged at 0.25%. Governor Tiff Macklem will hold a press conference.

Economic Data:

        • Mexico CPI
        • Canada housing starts
        • Canada rate decision
        • New Zealand ANZ Truckometer heavy traffic index, ANZ business confidence and activity outlook, manufacturing activity
        • South Korea unemployment
        • Japan money stock, bankruptcies, machine tool orders
        • Australia Westpac consumer confidence, home loans, investor loan value
        • South Africa business confidence
        • Hungary CPI
        • France industrial confidence
        • China PPI, CPI

Thursday, September 10th

-The ECB will keep monetary policy unchanged, but they could signal more stimulus could be warranted later in the year.  Close attention will fall on the new forecasts for growth and inflation, which will provide insight on how optimistic the ECB is with the economic recovery. 

Economic Data:

    • U.S. initial jobless claims, PPI, wholesale inventories
    • EIA Crude Oil Inventory Report
    • New Zealand card spending, REINZ house sales
    • Japan core machine orders
    • Australia consumer inflation expectations
    • France industrial production
    • Italy industrial production
    • Turkey unemployment
    • Czech CPI
    • Sweden, Norway, Denmark inflation
    • South Africa current-account balance, mining production, manufacturing production
    • China money supply, new loans, FDI

Friday, September 11th

-US consumer prices are expected to push higher for a third consecutive month.  The so-called core CPI is expected to come back down to earth after last month’s 0.6% which was the largest gain since 1991. 

-European Union finance ministers gather for a two-day meeting.

-The ECB’s Jens Weidmann speaks on a panel at a Bundesbank conference in Frankfurt.

Economic Data:

    • U.S. CPI, Baker Hughes rig count, Treasury budget statement
    • Mexico industrial production
    • New Zealand performance of manufacturing index, food prices
    • Japan PPI, BSI business conditions
    • U.K. GDP
    • Spain industrial output
    • BOE inflation expectations survey
    • Turkey current-account balance
    • India industrial production

Sovereign Rating Updates:

Austria (S&P), Norway (S&P), Portugal (S&P), Poland (Moody’s)

Country

US

The US economic outlook continues to improve after another solid labor report and steady flow of positive vaccine developments.  The focus in the US however remains on the stock market selloff and if investors are starting to position for a choppy period going forward.  Positioning for a post-pandemic and presidential election could be starting to price in a rough road for big tech.  

The upcoming round of economic data should see US consumer prices rise for a third consecutive month, but be nowhere near to creating worry at the Fed.   

US Politics

President Trump still has a lot of ground to make up over the next two months.  Now that the conventions are over, Biden still seems to have a favorable lead, but it is shrinking.  In mid-August, Biden had a comfortable 12-percentage point lead against President Trump in the USA Today/Suffolk University Poll, but that has fallen down to 7-percentage points.  The first Presidential debate is not until September 29th, so the focus will fall on the several upcoming campaigning events.  

EU

It’s been a week of stimulus as far as the EU is concerned. The “France Relaunch” stimulus from Emmanuel Macron – totalling €100 billion, around 4% of GDP – aims to deliver a full economic recovery ahead of the 2022 election. Meanwhile, Germany has backed plans for more extraordinary deficit spending next year, having already extended its employment subsidies to the end of 2021. All of this at a time when the EU has agreed a historic recovery fund alongside its seven year budget. There’s no shortage of stimulus in Europe.

The ECB meeting should provide further clarity on the prospects for further easing before the end of the year. The economic recovery has slowed, Covid cases have been rising and annual inflation went negative last month. We may not get further stimulus next week but traders will be hanging on Lagarde’s every word, not to mention the new economic projections.

Brexit

Still no progress on the more contentious issues, most notably level playing field and fishing rights, but more talks scheduled to take place next week. None of this will come as great surprise with October being touted as the deadline. We’ve seen it all before. This is going to the wire, expect more frustration after the next round of talks.

UK

The focus for UK officials this week will be Brexit talks as the country tries to avoid adding no deal to the list of problems for business. The PMIs this week were encouraging, as is the BoE’s position that it stands prepared to load more stimulus and has plenty of firepower to do so. Low tier data next week is unlikely to make a considerable difference. 

China

All quiet on the trade front with the US. Heavy data week with Balance of Trade the highlight on Tuesday. Continued recovery in export component expected. If US equity sell-off persists, it will weigh on China equities this week. 

Hong Kong

Security law worries have been ignored by stock markets which are concentrating on upcoming IPOs such as Ant Financial, proving that money talks. 

No significant data.

India

Covid-19 continues to wreak havoc on the domestic economy, heightening fears about growth as the stability of the banking system. India will shortly become the no 2 infected country with no end in sight. A protracted US equity sell-off could exacerbate concerns and threaten fragile recovery by the INR and India stock markets.

India Industrial Production for July expected to contract by another 15%, heighlighting Covid’s impact on the economy. WPI released on the 14th September could raise the very real fears that India is facing stagflation.

New Zealand 

The New Zealand covid-19 outbreak appears to be coming under control, lifting the currency and equities. An extended Auckland lockdown will weigh on data in the coming weeks though. The RBNZ is considering negative rates and further signs of deterioration will raise expectations for further easing.  Vulnerable to poor China data on Monday.

Australia 

Trade relations with China continue to worsen with Barley imports banned as yet another “probe” is launched. Fallout transitory as long as coal, copper and iron ore are left alone. Strong negative if those are targeted.

Data is second tier this week with a recovery in job ads expected to continue, boosting sentiment. 

As a pro-cyclical market, a sustained equity sell-off and/or poor China data on Monday could negatively impact Australian markets.

Japan

Heavy data week with Japan Q2 GDP, Machinery Orders and Tankan Index. All are expected to show Japan remains in recession as export facing industry struggles with demand. USD/JPY mid-range awaiting next move, Japan equities firm despite US weakness.

Abe’s successor will be announced on September 14th. Little market impact in the meantime as it is expected that the pillars of Abenomics will remain mostly intact.


Markets

Oil

Oil staged a bit of a recovery after tumbling in the middle of the week only to tumble again after the jobs report. Once again, we’re facing a market that was struggling to maintain upside momentum and a few headlines provided the catalyst for some profit taking. The consolidation could have continued for longer but once a couple of technical levels fell, it’s just accelerated from there. WTI has since found some support just above $40 but $39 is arguably more significant support. It may now find some resistance around $42.

Gold

Gold is coming under pressure again after the dollar jumped in the aftermath of the jobs report, piling further misery on the yellow metal. The US PMI report on Tuesday ruined its attempt to break $2,000 again, with the dollar also rising on the back of that report. Gold now finds itself back around the lower end of its $1,900-2,000 range and support is looking vulnerable. 

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Spread & Containment

War, peace and security: The pandemic’s impact on women and girls in Nepal and Sri Lanka

The impacts of COVID-19 must be incorporated into women, peace and security planning in order to improve the lives of women and girls in postwar countries…

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Nepalese girls rest for observation after receiving the Moderna vaccine for COVID-19 in Kathmandu, Nepal. (AP Photo/Niranjan Shrestha)

Attention to the pandemic’s impacts on women has largely focused on the Global North, ignoring countries like Nepal and Sri Lanka, which continue to deal with prolonged effects of war. While the Nepalese Civil War concluded in 2006 and the Sri Lankan Civil War concluded in 2009, internal conflicts continue.

As scholars of gender and war, our work focuses on the United Nations Security Council Resolution 1325 on women, peace and security. And our recently published paper examines COVID-19’s impacts on women and girls in Nepal and Sri Lanka, looking at policy responses and their repercussions on the women, peace and security agenda.

COVID-19 has disproportionately and negatively impacted women in part because most are the primary family caregivers and the pandemic has increased women’s caring duties.

This pattern is even more pronounced in war-affected countries where the compounding factors of war and the pandemic leave women generally more vulnerable. These nations exist at the margins of the international system and suffer from what the World Bank terms “fragility, conflict and violence.”

Women, labour and gender-based violence

Gendered labour precarity is not new to Nepal or Sri Lanka and the pandemic has only eroded women’s already poor economic prospects.

Prior to COVID-19, Tharshani (pseudonym), a Sri Lankan mother of three and head of her household, was able to make ends meet. But when the pandemic hit, lockdowns prevented Tharshani from selling the chickens she raises for market. She was forced to take loans from her neighbours and her family had to skip meals.

Some 1.7 million women in Sri Lanka work in the informal sector, where no state employment protections exist and not working means no wages. COVID-19 is exacerbating women’s struggles with poverty and forcing them to take on debilitating debts.

Although Sri Lankan men also face increased labour precarity, due to gender discrimination and sexism in the job market, women are forced into the informal sector — the jobs hardest hit by the pandemic.

Two women sit in chairs, wearing face masks
Sri Lankan women chat after getting inoculated against the coronavirus in Colombo, Sri Lanka, in August 2021. (AP Photo/Eranga Jayawardena)

The pandemic has also led to women and girls facing increased gender-based violence.

In Nepal, between March 2020 and June 2021, there was an increase in cases of gender-based violence. Over 1,750 incidents were reported in the media, of which rape and sexual assault represented 82 per cent. Pandemic lockdowns also led to new vulnerabilities for women who sought out quarantine shelters — in Lamkichuha, Nepal, a woman was allegedly gang-raped at a quarantine facility.

Gender-based violence is more prevalent among women and girls of low caste in Nepal and the pandemic has made it worse. The Samata Foundation reported 90 cases of gender-based violence faced by women and girls of low caste within the first six months of the pandemic.

What’s next?

While COVID-19 recovery efforts are generally focused on preparing for future pandemics and economic recovery, the women, peace and security agenda can also address the needs of some of those most marginalized when it comes to COVID-19 recovery.

The women, peace and security agenda promotes women’s participation in peace and security matters with a focus on helping women facing violent conflict. By incorporating women’s perspectives, issues and concerns in the context of COVID-19 recovery, policies and activities can help address issues that disproportionately impact most women in war-affected countries.

These issues are: precarious gendered labor market, a surge in care work, the rising feminization of poverty and increased gender-based violence.

A girl in a face mask stares out a window
The women, peace and security agenda can help address the needs of some of those most marginalized. (AP Photo/Niranjan Shrestha)

Policies could include efforts to create living-wage jobs for women that come with state benefits, emergency funding for women heads of household (so they can avoid taking out predatory loans) and increasing the number of resources (like shelters and legal services) for women experiencing domestic gender-based violence.

The impacts of COVID-19 must be incorporated into women, peace and security planning in order to achieve the agenda’s aims of improving the lives of women and girls in postwar countries like Nepal and Sri Lanka.

Luna KC is a Postdoctoral Researcher at the Research Network-Women Peace Security, McGill University. This project is funded by the Government of Canada Mobilizing Insights in Defence and Security (MINDS) program.

Crystal Whetstone does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.

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Government

CDC Announces Overhaul After Botching Pandemic

CDC Announces Overhaul After Botching Pandemic

After more than two years of missteps and backpedaling over Covid-19 guidance that had a profound…

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CDC Announces Overhaul After Botching Pandemic

After more than two years of missteps and backpedaling over Covid-19 guidance that had a profound effect on Americans' lives, the Centers for Disease Control (CDC) announced on Wednesday that the agency would undergo a complete overhaul - and will revamp everything from its operations to its culture after failing to meet expectations during the pandemic, Bloomberg reports.

Director Rochelle Walensky began telling CDC’s staff Wednesday that the changes are aimed at replacing the agency’s insular, academic culture with one that’s quicker to respond to emergencies. That will mean more rapidly turning research into health recommendations, working better with other parts of government and improving how the CDC communicates with the public. -Bloomberg

"For 75 years, CDC and public health have been preparing for Covid-19, and in our big moment, our performance did not reliably meet expectations," said Director Rochelle Walensky. "I want us all to do better and it starts with CDC leading the way.  My goal is a new, public health action-oriented culture at CDC that emphasizes accountability, collaboration, communication and timeliness."

As Bloomberg further notes, The agency has been faulted for an inadequate testing and surveillance program, for not collecting important data on how the virus was spreading and how vaccines were performing, for being too under the influence of the White House during the Trump administration and for repeated challenges communicating to a politically divided and sometimes skeptical public."

A few examples:

Walensky made the announcement in a Wednesday morning video message to CDC staff, where she said that the US has 'significant work to do' in order to improve the country's public health defenses.

"Prior to this pandemic, our infrastructure within the agency and around the country was too frail to tackle what we confronted with Covid-19," she said. "To be frank, we are responsible for some pretty dramatic, pretty public mistakes — from testing, to data, to communications."

The CDC overhaul comes on the heels of the agency admitting that "unvaccinated people now have the same guidance as vaccinated people" - and that those exposed to COVID-19 are no longer required to quarantine.

Tyler Durden Wed, 08/17/2022 - 12:22

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Economics

Why Is No One at Nike Working This Week?

And will the move gain broader acceptance among American employers?

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And will the move gain broader acceptance among American employers?

You go into an office, pull at the door and find that it doesn't give and nobody's there. 

It may sound like the start of the common rushing-to-the-office-on-a-Saturday nightmare but, more and more, collective time off is being embraced by employees as part of a push for a better work culture.

While professional social media platform LinkedIn  (MSFT) - Get Microsoft Corporation Report and dating app Bumble  (BMBL) - Get Bumble Inc. Report had already experimented with collective time off for workers, the corporate ripples truly began with Nike  (NKE) - Get Nike Inc. Report.

In August 2021, the activewear giant announced that it was giving the 11,000-plus employees at its Oregon headquarters the week off to "power down" and "destress" from stress brought on by the covid-19 pandemic.

"In a year (or two) unlike any other, taking time for rest and recovery is key to performing well and staying sane," Matt Marrazzos, Nike's senior manager of global marketing science, wrote to employees at the time.

Nike Is On Vacation Right Now

The experiment was, not exactly unexpectedly, very well-received — a year later, the company instituted its second annual "Well-Being Week." Both the corporate headquarters in Beaverton, Ore., and three Air Manufacturing design labs with over 1,500 employees are closed for a collective paid vacation from Aug. 15 to 19.

"We knew it would be impactful, but I was blown away by the feedback from our teammates [...]," Nike's Chief Human Resources Officer Monique Matheson wrote in a LinkedIn post.

"Because everyone was away at the same time, teammates said they could unplug – really unplug, without worrying about what was happening back at the office or getting anxiety about the emails piling up."

Shutterstock/TheStreet

Of course, the time off only applies to corporate employees. To keep the stores running and online orders fulfilled but not exacerbate the differences between blue and white collar workers, Nike gave its retail and distribution employees a week's worth of paid days off that they can use as they see fit.

Nike has tied the change to its commitment to prioritize mental health. In the last year, it launched everything from a "marathon of mental health" to a podcast that discusses how exercise can be used to manage anxiety and depression.

Rippling Through the Corporate World?

But as corporations are often criticized for turning mental health into positive PR without actually doing much for employees, the collective week off was perhaps the most significant thing the company did for workers' mental health.

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The practice of set office closures has long been common practice in many European countries. In France, not only corporate offices but even restaurants and retail stores empty out over the month of August for what is culturally considered sacred vacation time. 

But as American work culture prioritizes individual choice and "keeping business going" above all else, the practice has been seen as radical by many corporate heads and particularly small businesses that may find it more difficult to have such a prolonged drop in business. 

But in many ways, the conversations mirror some companies' resistance to remote work despite the fact that one-fourth of white-collar jobs in the U.S. are expected to be fully remote by 2023

"This is the kind of perk that makes employees want to stay," industry analyst Shep Hyken wrote in a comment for RetailWire. "And knowing they can’t completely shut the entire company down, I like the way they are compensating the distribution and retail store employees."

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