In this week’s recap, U.S. stocks were mixed and global equities retreated from record highs as investors balanced growing concerns about the slowing pace of the economic recovery and expectations that the Federal Reserve will delay tapering its bond purchases and traders’ fear the Covid-19 spread will weigh on economic growth. The European Central Bank announced Thursday a slowing in the pace of net asset purchases, under its pandemic emergency purchase program, amid surging inflation & strong economic growth. Euro-zone inflation hit a decade high of +3% in August & GDP climbed +2% in Q2, exceeding analyst expectations. The interest rate on the ECB’s main refinancing operations will remain at 0%, on the marginal lending facility at +0.25% & on the deposit facility at -0.5%.
China posted a trade surplus of $58.34 billion in August, versus analyst forecasts for a $51.05B surplus & $56.58B in July. The trade surplus with the United States, a source of decades-long controversy between the two economic superpowers, rose to $37.68B from $35.4B in July. This situation will likely only increase the trade friction between the two countries.
Global central bankers issue a new round of warnings about the utility & inherent volatility of crypto assets. Riksbank Gov. Stefan Ingves stated that doubts remain about the staying power of Bitcoin, the world’s most prominent digital asset if it isn’t government-backed. Meanwhile, Bank of Mexico Gov. Alejandro Diaz de Leon on Thursday separately stated that Bitcoin is a tool for barter, rather than legal tender & identified it as a poor store of value, citing its wild price swings.
U.S. Department of Labor released July’s increase in hiring figures; high volatility in Bitcoin just as El Salvador adopts it as legal tender; 7.0 magnitude earthquake strikes central Mexico; support for Merkel’s party at historic lows; Johnson to raise taxes in the UK to solve health crisis; U.S. pandemic unemployment programs ended over the weekend; Tech giants want to incorporate certain aspects of chip development; Aluminum prices climbed to the highest in over a decade.