USA

Trump supporters storm U.S. Capitol

The images in the news yesterday of the formal certification of the US election result by US politicians were terrifying. Trump’s supporters stormed the US Capitol and thereby the seat of the US Congress, the US legislature. The situation quickly escalated. US President Trump, who is still in office, appealed to protesters to act peacefully. However, he did not clearly ask them to leave or criticise them. He still maintains that he did not lose the election. By contrast, his Vice President, Mike Pence, publically demanded that Trump supporters leave the Capitol peacefully. US President-elect Joe Biden has called on Trump to officially accept the election results. Police and security forces were able to secure the building. The session in Congress continued. There is obviously a (probably small) proportion of the population that will not stop at anything, including violent and armed protests. This is without doubt certainly not true…

New US fiscal package does not lead to rise in yields on US Treasuries

Policymakers in the United States have agreed on a $900 billion fiscal package. Financing requirements will therefore remain high in the coming year. The aid measure will undoubtedly be financed largely by new debt. This will inevitably be accompanied by an increase in US government bond issuance. The more government bonds are issued, the greater the risk of rising yields for US government bonds. We believe this risk to be limited for the United States though. There are several reasons for this expectation. On the one hand, the inflation rate remains at a low level for the coming year. On the other, many global investors consider US government bonds to be extremely safe and liquid, so they are likely to invest accordingly. Strong demand for U.S. government securities, especially in these uncertain times in the wake of corona, should help prevent a sharp rise in yields. The main reason for…

USA: Corona makes job engine stutter

The US economy loses momentum in the winter. More and more indicators are pointing to this, including the November employment report. Although the recovery process on the labor market has continued recently, the pace has slowed visibly once again: the unemployment rate fell from 6.9 percent in the previous month to 6.7 percent. Compared with the sharp 1 percentage point decline in October, the situation therefore improved only slightly in the past month. At the same time, the increase in employment fell to 245,000 in November, compared with around 610,000 in October. The reason for this development can be quickly identified: the corona pandemic is once again on the rise and is dominating events on the labor market. The increase in new infections was dramatic in November. New lockdown measures are therefore threatening and the service sector as a job engine is stuttering. The leisure and accommodation sector, for example,…

USA: Price pressure eases again

The most recent inflation report from the Bureau of Labor Statistics provides one piece of news above all: The ongoing ultra-loose monetary policy in the USA is still not leading to high price pressure, and the economic problems do not allow this to happen. In October, prices for goods and services remained unchanged on average compared to the previous month. Although food prices did rise and prices were also raised in individual service and goods categories, there was still no sign of a recovery. However, this was offset elsewhere. For example, gasoline became cheaper, and higher discounts were again granted for clothing and car insurance. The main reason for this is probably the fact that the economy is losing momentum again: As a result, the world market price for crude oil (WTI) in the fall was temporarily somewhat lower than in the summer, and companies were probably confronted with weaker…

Bitcoin on the hunt for new records?

  Bitcoin, the leading crypto currency, has recently dared to climb to price levels that have not been seen since the beginning of 2018, with nearly 16,000 USD. This level, which can be attributed solely to the back and forth in the U.S. presidential election and a potentially accompanying uncertainty about the political future of the world’s largest economy, is certainly not enough. On the one hand, there can be no talk of great uncertainty in view of appreciating emerging market currencies and rising share prices worldwide. On the other hand, the upward movement of the crypto currency has been continuing since the beginning of September. The main driver of the positive dynamics is the hope for a long-term increase in demand and growing general acceptance. The basis for this assessment with regard to institutional investors are reports on the asset managers Grayscale and Fidelity. The Bitcoin fund of the…

USA: Labor market develops robustly, but urgent need for action for the new president

In the USA, the hanging game for the presidential election continues. Meanwhile, the Bureau of Labor Statistics reports that the recovery in the US labor market continued at a surprisingly dynamic pace in October. Nevertheless, combating unemployment remains an important challenge for the new president. Above all, the new administration must ensure that the pandemic does not get completely out of control so that new nationwide lockdown measures can be avoided. On the other hand, the households affected by unemployment need new state support as soon as possible. The unemployment rate in particular has made a remarkable downward turn in October – it fell from 7.9 percent in September to 6.9 percent in October. Many Americans have obviously found a job again, which is gratifying. But there are still more than 11 million people without a job and the number of long-term unemployed has again risen significantly (duration of unemployment…

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