The Day Today 9th June 2021

  • US Senate passed a $250bn bill to boost government spending on technology R&D in a bid to address China tech threat
  • Biden’s talks with leading Republicans on a sweeping infrastructure spending package collapsed now he will focus on a bipartisan group
  • China CPI 1.3% y/y vs f/c 1.6%, PPI 9% vs f/c 8.5% (see comment below)
  • China considers a cap on the price of thermal coal
  • Sunak wants City of London exempt from G7 global tax
  • Paris and Berlin lead fight to dilute Brussel’s strict bank capital rules, due to be announced Sept/Oct
  • RBA Kent said ”inflation unlikely to be sustainable within the target range of 2-3% until 2024 at the earliest”
  • A senior US financial regulator warned against strict cryptocurrency rules as “not sure that’s going to be great for innovation”

S&P 500 closed little changed, Amazon and Apple gains boosted the Nasdaq and so-called Meme stocks (retail investor interest) were active. Asian equity markets traded in narrow ranges.

China Producer Prices rose at the fastest pace in thirteen years but the bigger question will be whether companies can pass on those higher factory gate prices to consumers. We don’t think so. The shock to both aggregate demand and aggregate supply runs the risk of stagflation.

It Still All Comes To Nought

The Week That Will Be

The Economist: Finance and economics articles summarised

On this day in 1983 Margaret Thatcher’s Conservative Party won a landslide second term election victory, taking 397 seats compared to Labour’s 209

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