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Finance

Global Stock Benchmark at new high

Big tech shares edged higher by helping a benchmark world stock index post. This is a sixth consecutive closing high, after a weak U.S. jobs report. Labor Department data that showed wages increasing more than expected in August. This in turn had raised inflation fears, leading longer-dated Treasury yields to jump.

MSCI’s all-country world index, notched a new record. Meanwhile, Apple Inc, Amazon.com Inc, Google parent Alphabet Inc and Facebook Inc advanced. The tech gains also helped the Nasdaq set a fresh closing high. The Dow Industrials and S&P 500 fell as slower U.S. jobs growth raised questions, which were all about the pace of the recovery. Lee Ferridge, North American head of multi-asset strategy at State Street Global Markets stated that the Fed taper announcement is off the table in September. And also added that the support from the Fed for these markets is going to persist. And the Taper starts later rather than sooner, which is a positive for equities. As long as the Fed is printing, it means that the equity markets are supported by the QE liquidity arguments.

In seven months, US employers has created more jobs, as the Delta variant hurt the leisure and hospitality sector. But still the job reports showed that a 0.6% increase in wages underlies the strength in the economy. Nonfarm payrolls increased by 235,000 in August. But also, the unemployment rate fell to 5.2% from 5.4% in July. Euro zone business activity, was stronger last month. This suggests that the bloc’s economy could be back to pre-COVID-19 levels, by this year-end.

Yields on the benchmark 10-year Treasury note rose 3 basis points to 1.324%. The dollar index dropped to a low of 91.941. And the euro traded flat at 1.1875, the yen slid 0.19% to 109.72. Japanese shares jumped after officials said Prime Minister Yoshihide Suga would step down. Japan’s TOPIX stock index rose to a 30-year high. Meanwhile, Chinese blue chips were down 0.5% and Hong Kong was off 0.72%. Oil prices slipped on the U.S. labor report. Brent crude futures fell 42 cents, on the other hand the U.S. crude slid 70 cents to settle at $69.29 a barrel. Gold has advanced more than 1% to its highest in 2-1/2 months. U.S. gold futures settled 1.2% higher.

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Finance

Euro zone ministers expect inflation to slow in 2022

The acceleration of euro zone inflation, driven energy prices, is mostly temporary. Then the price growth will slow down again. The euro zone finance ministers agreed that, that too the next year as forecasted by the European Central Bank and the European Commission.

Paschal Donohoe, chaired the talks of the ministers in Luxembourg. In a news conference he said that there was also agreement that the inflation spike was not an argument against the transition to renewable sources of energy. This is under the EU’s ambitious plan of reducing CO2 emissions to zero by the year 2050.

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Finance

Under new rules, borrowing for investment sensible

British finance minister Rishi Sunak said that the government borrowing to fund investment was a sensible thing. This is to allow under new fiscal rules that he is likely to announce, unlike borrowing for day-to-day spending. He said that borrowing for capital investment that is going to drive up their growth is probably a sensible thing for them. And that too particularly in an environment of slightly lower interest rate. Sunak stated this in an event on the sidelines of the annual conference of Britain’s ruling Conservative Party. This event was organized by the Taxpayers’ Alliance advocacy group. Sunak stated in that event, that borrowing for more day-to-day spending is probably less something that you would want to have as part of your framework.

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Finance

IMF board to interview Georgieva-sources

The International Monetary Fund’s executive board is going to interview Managing Director Kristalina Georgieva. This is regarding that; its reviews claims that she pressured World Bank staff to alter data to favor China in her previous role. Board members were initially expected to meet with Georgieva. But spent their time working on other regular business matters.

The board members spent hours for questioning lawyers from the WilmerHale firm. This is about their World Bank investigation report which alleged that Georgieva, as the bank‘s CEO applied undue pressure on staff, to alter data in the flagship “Doing Business” report to benefit China. Then, an IMF spokesperson said that the IMF board remains committed to a thorough, objective, and timely review of the matter. Georgieva has strongly denied the accusations.

The upcoming interviews could prove pivotal in either increasing support for Georgieva. This is with many IMF shareholders are keen to wrap up the board’s deliberations on the matter. The fund’s most influential member governments, including the top shareholder the United States, have withheld public judgment. The World Bank tasked WilmerHale with investigating the “Doing Business” data irregularities identified in 2020. The law firm’s report contends Georgieva. The former World Bank President Jim Yong Kim’s office pressured staff to manipulate data so that the China’s global ranking in the “Doing Business 2018” study of investment climates rose to 78th from 85th.

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