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News review 20.09.2022


What is Poland up to?

Prime Minister Morawiecki stated that Poland will defend Hungary in the matter of deprivation of EU funding.

At the same time, the EU seems to be taking revenge on Hungary for its counter-version and clearly pro-Russian views.

Poland itself is taking an anti-German stance, and Germany is playing along with the Kremlin.

The plot of conflicts in the EU is interesting.

Biden said that the U.S. would protect Taiwan in case China attacks the island.

This is the opposite position regarding Ukraine on the eve of a russian invasion. And then guess - this position was a bait to lure Putin to attack "defenseless Ukraine". Or did the U.S. really doubt the need for such support at first, and only after seeing the selfless defense of Kiev, Kharkov, Nikolaev and other cities decided to support Ukraine.

True, there is still a difference in the U.S. attitude toward Ukraine and Taiwan - when asked by a CBS journalist about the possibility of open participation of U.S. troops in the defense of Taiwan, Biden replied "Yes."

Scholz and Macron plan to meet with Xi Jinping in China in separate meetings

Exchange prices for gas in EU fall below $1800 per thousand cubic meters

Storage capacity is showing: in Germany, it has reached 90%.

Consumer inflation in Japan rose 3% y/y in August

That was above the Bank of Japan's target of 2% for the fifth month in a row.

The Japanese yen is stable around 143 to the dollar. Speculators are wary of Japanese authorities' interventions aimed at strengthening the yen. But its trend is based on the soft monetary policy of the Bank of Japan.

By the way, consumer prices excluding fresh food and energy prices in Japan rose by 1.6% y/y in August. And it allows the Bank of Japan not to change anything yet.


Elon Musk: "Starlink is now available on all continents, including Antarctica."

The promised speeds are very good - up to 1GB per second.

China has softened its monetary policy again with a 14-day repo rate cut from 2.25% to 2.15%.

This is accompanied by a mild devaluation of the Chinese yuan.

But the People's Bank of China left its benchmark rates unchanged Tuesday morning:

- the annual benchmark lending rate at 3.65%,

- the five-year rate at 4.30%.

The Chinese stock market is up an average of 1% in the morning. The news from the NBK was expected. And the yuan continues to trade above 7 yuan per dollar.

JPMorgan's Kolanovic remains bullish on equities.

"While more hawkish central bank pricing and the resulting increase in real yields are putting pressure on risk assets, we also believe any fall from here will be limited given:

1) higher-than-expected earnings growth and signs that the revision may bottom out,

2) very low positioning by retail and institutional investors, and

3) lower long-term inflation expectations from both surveys and market indicators."

"Therefore, we remain cautiously optimistic and continue to combine a significant overweighting of equities in our model portfolio with an underweighting of credit as a hedge."

"We are 'longing' the dollar as a hedge against hawkish Fed action and see significant gains in commodity prices from current levels."

Ford (F) shares fall more than 4 percent in the after-hours session

The company said inflation and parts shortages will leave it with more unfinished cars than it expected. Supply chain problems for the automaker are far from over.

The company will have 40,000 to 45,000 vehicles at the end of the third quarter, "missing some parts that are currently in short supply."

And payments to suppliers will be about $1 billion higher than expected for the quarter because of inflation.

However, the company reiterated its financial projections for the year.

Financial markets

The U.S. stock market was up slightly (+0.7%) at the close of trading on Monday. The best performing stock was Apple (AAPL) as investors bet on strong demand for iPhone 14.

Oil stocks, which were falling on the slump in oil prices, even bought back at the close of trading. Raw materials remain in strong demand.

Yes, and oil itself has been bought back - it has continued to trade in place in the market noise for almost the last two weeks.

Markets are neutral in the morning.

The dollar is also stomping around. And bitcoin is trying to get back to $20k (now $19.5k).

So all is quiet in the morning.

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