Rating agency Fitch warned debt limit games could put US AAA rating at risk. If US debt limit were not raised or suspended in time, political brinksmanship and reduce the financing flexibility could increased risk of sovereign default United States of America at ‘AAA’
The European Union has postponed the next round of negotiations for a free trade agreement with Australia for a month. The move clearly is in retribution for the cancellation of the French $90 billion submarine contract.
Centre-left SPD and their candidate, Olaf Scholz, secured a narrow win in the German election which saw Angela Merkel’s centre-right CDU party and their candidate, Armin Laschet, plunge to a historic low. Parties will embark on “exploratory talks” to form a government, with a three-way coalition considered the most likely.
Prime Minister Justin Trudeau of Canada called an election for next month, on September 20. He has been emboldened by polls showing his Liberal Party with a large enough lead to retake a majority in parliament.
Federal Reserve Governor Lael Brainard said on Monday “The Federal Reserve is stepping up its research and public engagement on a digital version of the U.S. dollar.” Fed Chair Jerome Powell said last week the Fed will release a paper looking at how CBDCs could affect payments.
Standard and Poors rating agency affirmed that the US sovereign ratings remain ‘AA+/A-1+’ and the outlook remains stable. The US is thundering to increasingly massive debt levels since the global pandemic. The S&P says sovereign stability is based on strong American institutions, a diversified and resilient economy, extensive monetary policy flexibility
China’s LNG imports could hit a record high in Dec as industrial demand returns Reuters reported sources saying. Domestic gas consumption for early December up 20% year-on-year adding to the LNG demand.
Futures and commodities were hit violently in the first quarter of 2020 with the black swan Covid -19 event running roughshod over energy markets in particular. The biggest gainers were safehaven elements such as the VIX, treasuries and foodstuffs.
Currencies reacted much like futures and commodities in the first qurter of 2020. The black swan Covid -19 event saw the biggest gainers the safehaven currencies led by the Japanese Yen, Swiss Franc and US dollar.
Recent strength in precious metals and weather affected grains has seen commodities prices largely higher for the first half of 2019, the energy heavy GSCI is up 16.% on the year with the more balanced Bloomberg index up 5%.