(Original title: Overseas Financial Media Focus: Mid-term election votes in US states have ended, and congressional control may change hands)
The Financial Associated Press reported on November 9 that overnight, overseas markets focused on the global economy and the energy market. In the global economy, a former Fed official said that interest rates should rise to 5.5% to quell inflation, but it will fall into a mild recession; analysts said Japan may have cut some U.S. debt holdings, showing speculators that they have enough ammunition to intervene in the currency market. In the energy market, the EIA lowered its forecast for U.S. crude oil production next year; the European Commission said that setting a natural gas price cap would affect long-term contracts or supply security. In addition, the voting in the midterm elections of various states in the United States has ended one after another, and congressional control may change hands.
Reuters: U.S. state midterm elections end one after another, congressional control may change hands
Americans cast their final vote on Tuesday in the closely contested midterm elections that will determine whether Republicans win 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 have been closed since 6 p.m. ET (7 a.m. Beijing time on Wednesday), but in competitive states, the results of the votes may not be known for days or even weeks.
Opinion polls and gaming markets show that Republicans look set to win control of the House of Representatives and possibly even the Senate.
Investors expect a big Republican victory, an outcome that could ease concerns over spending and regulation by Democrats but set off a bitter fight when the U.S. debt ceiling is raised next year.
CNBC: Former Fed official says rates should rise to 5.5% to tame inflation, but will slip into mild recession
On Tuesday (November 8) local time, former Boston Fed President Eric Rosengren said that continued inflationary pressures will force the Fed to raise interest rates to a higher level, and that the U.S. economy will “have a sizable impact next year”. There is a considerable chance” of a recession.
Rosengren told the media in an exclusive interview that it now looks likely that the Fed will raise its terminal rate, the end of its interest rate hike cycle, to above 5%, which is higher than the mainstream investor forecast of 5%. The U.S. economy has entered a mild recession in 2018.
Asked how high the terminal rate could go, Rosengren said he thought the exact figure was at least 5.5 percent. He added, “I think the U.S. is likely to have a mild recession next year.”
Bloomberg: Bank of England Chief Economist: Sharply shrinking workforce suggests 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 was continuing to put upward pressure on inflation, suggesting further interest rate hikes were needed.
At least 600,000 people have dropped out of the workforce since the outbreak of the coronavirus in early 2020, Pill said. While the economy may be 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 tight labor 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 was particularly concerned about signs that inflation expectations could be above target, a process known as “de-anchoring”. Policymakers must prevent a wage-price spiral, he said.
“Concerns about wages, self-sustaining dynamics in prices and cost setting, given the tight labour market, mean we have more work to do. We will take the necessary actions to bring inflation to 2 per cent on a sustainable basis. target,” Pill said at a UBS event.
Bloomberg: Analysts say Japan may have cut some U.S. debt holdings to show speculators that it has enough ammunition to intervene in currency markets
Analysts said Japan may have sold some U.S. Treasuries to fund intervention in the yen and show speculators that Japan has more ammunition at its disposal than they expected.
Japan’s holdings of overseas securities fell by $43.9 billion in October to $941.3 billion, according to a report from Japan’s Finance Ministry on Tuesday. A simple comparison shows that it is close to the $42.9 billion that Japan invested in boosting the yen last month.
In contrast, foreign exchange deposits, which have long been seen as the main source of funds for intervention in the foreign exchange market, were roughly flat at $137 billion. Analysts previously said the sell-off of overseas bonds risked being countered by foreign governments and could exacerbate the yen’s depreciation by pushing up overseas bond yields.
“Japan is sending a strong signal that the country has ample resources to intervene in the currency market,” said Yuji Yamazaki, currency strategist at SMBC Nikko Securities. “With these resources, it is possible to withstand the constant attack from the market.”
Bloomberg: Bitcoin and other cryptocurrencies plummet across the board, traders doubt Binance’s acquisition of FTX is still uncertain
As the news surrounding Binance’s possible acquisition of rival FTX has been gradually digested, the cryptocurrency market has plunged again, and traders are worried that the troubles in the industry and the entanglement between the big players in the industry may be further down.
Binance CEO Changpeng Zhao shocked the cryptocurrency world on Tuesday when he announced that Binance would acquire liquidity-distressed rival FTX.com. Observers pointed out that the market was jittery about the prospect of the deal, as Changpeng Zhao tweeted that the letter of intent signed by both parties was not binding.
Bitcoin tumbled about 15 percent 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 almost wiped out, with Ether, Polkadot, and Avalanche all tumbling 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’s definitely related to the re-emergence of the crisis caused by FTX, which itself has a solvency crisis. We don’t yet know if the troubles with FTX are over or how it will play out. “
Reuters: EIA cuts U.S. crude oil production forecast next year
The U.S. Energy Information Administration (EIA) cut its forecast for U.S. crude oil production growth next year by 21%, days after oil producers warned that inflation and supply chain constraints would continue.
U.S. crude production is expected to rise by about 480,000 bpd to 12.31 million bpd, the EIA said, from an earlier forecast of 610,000 bpd.
Reuters: European Commission says setting gas price cap 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 gas price cap without compromising long-term contracts or security of supply, two diplomatic sources told the media. Backlash from Germany and the European Commission has frustrated countries seeking to set price caps.
As many as 15 countries demanding a cap are threatening to block other elements of an energy deal reached by leaders in October, including the launch of joint purchases, as long as the executive committee does not come up with a realistic proposal for a cap, two sources said. and setting new price benchmarks.
Bloomberg: FedEx grounded planes, weak demand prompts companies to take steps to cut costs
FedEx has taken steps to cut costs, cutting some flights and grounding planes amid weak demand for package deliveries.
The company 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 loads at the ground level.
The measures mirror the company’s efforts in September, when FedEx said it would take a series of major steps to tackle the daunting task of tackling weakness in Asia and challenges in Europe.