Bank of England

"Technology Is Replacing Brains As Well As Brawn" - Challenging The 'Official' Automation Narrative (& Social Order)

...even if the academics are right and new high-skill jobs emerge to replace the ones that are being automated away, huge disruptions would still await. Large portions of the global workforce would still need retraining. And if work becomes a luxury, widespread joblessness and greater inequality could make it increasingly more difficult for the government to maintain social order.

Frontrunning: June 23

  • One year after Brexit: Forget euro zone breakup, sterling now deemed riskier (Reuters)
  • Senate Holdouts Seek Upper Hand in Perilous Health Bill Talks (BBG)
  • Trump’s Tape Ruse Risks Fresh Legal Jeopardy in Russia Probe (BBG)
  • Arab states demand Qatar closes Jazeera, cuts back ties to Iran (Reuters)
  • Qatar Seen Rejecting List of Severe Demands to End Gulf Crisis (BBG)

Frontrunning: June 22

  • European stock markets stumble as oil languishes near lows (Reuters)
  • Some Trump Aides Want a New Leader at the Fed (BBG)
  • Goal of Saudi Shake-Up: Drag Country Into the Modern Era (WSJ)
  • Under fire in Washington, Trump back in campaign mode in Iowa (Reuters)
  • Revenue Slides at Some Trump Businesses, but Vegas Tower Brings Windfall (WSJ)

Frontrunning: June 21

  • Republican Handel Wins Georgia House Seat, Dashing Democrats’ Hopes (BBG)
  • Uber CEO Kalanick Quits as Investors Revolt (WSJ)
  • Saudi King’s Surprise Shakeup Clears Son’s Path to the Throne (BBG)
  • After weeks of secrecy, U.S. Senate to unveil healthcare bill (Reuters)
  • Latest Election-Hacking Hearings to Focus on State-Level Events (WSJ)

Oil Bear Market Sends Global Stocks, Yields Sliding; Chinese MSCI Addition Fizzles

In an eventful overnight session which saw a historic transition in Saudi Arabia, an unexpeted Republican victory in the Georgia Special Election, China's inclusion in the MSCI EM index and Travis Kalanick's resignation, S&P futures continued to fall, alongside stock markets in Asia and Europe, while oil prices extended their drop despite a larger than expected draw reported by API on Tuesday.

Key Events In The Coming Quiet Week: Brexit, Housing And Lots Of Fed Speakers

In an otherwise relatively quiet week in which the only upcoming US data is housing, current account and jobless claims, UK politics will again draw attention, one year (on Friday) after the Brexit referendum and as noted earlier, Brexit negotiations begin on Monday, despite lingering political uncertainty in the UK. Also no less than 9 FOMC members are scheduled to speak this week.

Frontrunning: June 16

  • Russia may have killed ISIS leader Baghdadi (Reuters)
  • About 4,000 more US troops to go to Afghanistan (AP)
  • Insurers Look to Ramp Up Premiums in Health Law Exchanges (WSJ)
  • U.N. envoy urges North Korea to explain why freed U.S. man is in coma (Reuters)
  • Wal-Mart Offers a Refuge for Sellers Tired of Amazon  (BBG)

Frontrunning: June 15

  • Markets Are Sliding Again (BBG)
  • Trump’s Legal Peril Deepens as Mueller Expands Scope of Probe (BBG)
  • Trump blasts report on possible obstruction of justice probe (Reuters)
  • Putin says ex-FBI head Comey gave no proof Russia meddled in U.S. election (Reuters)
  • The Fed Is Flying Blind (BBG)

Pound Spikes As BOE "Hawkish" Vote Surprises Traders

The pound sharply reversed overnight losses rising as much as 0.3% to 1.2794 after the BOE announced it kept rates at 0.25%,however the hawkish surprise was the 5-3 vote which was far closer than expected, as two more MPC members , Saunders and McCafferty joined Forbes in calling for a rate hike on the back of rising inflation concerns. 

Global Markets Rebound As Tech Rout Ends; Sterling Rises

As the Fed begins its two-day meeting, global stocks have recovered their footing and European shares rise, led by a bounce in tech stocks as last Friday's global selloff that started in the sector shows signs of abating. Asian stocks and U.S. futures gain as investors turn their attention to today's Jeff Sessions testimony as well as tomorrow's barrage of macro data including Yellen, CPI and retail sales.