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SYMBOL
LAST
BID
ASK
HIGH
LOW
NET CHG.
%CHG.
SPREAD
SPX
S&P 500 Index
6827.42
6827.42
6827.42
6899.86
6801.80
-73.58
-1.07%
--
DJI
Dow Jones Industrial Average
48458.04
48458.04
48458.04
48886.86
48334.10
-245.98
-0.51%
--
IXIC
NASDAQ Composite Index
23195.16
23195.16
23195.16
23554.89
23094.51
-398.69
-1.69%
--
USDX
US Dollar Index
97.950
98.030
97.950
98.500
97.950
-0.370
-0.38%
--
EURUSD
Euro / US Dollar
1.17394
1.17409
1.17394
1.17496
1.17192
+0.00011
+ 0.01%
--
GBPUSD
Pound Sterling / US Dollar
1.33707
1.33732
1.33707
1.33997
1.33419
-0.00148
-0.11%
--
XAUUSD
Gold / US Dollar
4299.39
4299.39
4299.39
4353.41
4257.10
+20.10
+ 0.47%
--
WTI
Light Sweet Crude Oil
57.233
57.485
57.233
58.011
56.969
-0.408
-0.71%
--

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Iranian Media Says 18 Crew Members Of Foreign Tanker Seized In Gulf Of Oman Over Carrying 'Smuggled Fuel' Detained

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Regional Governor: Two Killed In Ukrainian Drone Strike On Russia's Saratov

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Chinese Foreign Ministry - China Foreign Minister Met With United Arab Emirates Counterpart On Dec 12

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China's Central Financial And Economic Affairs Commission Deputy Director: Will Expand Export And Increase Import In 2026

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Thai Leader Anutin: Landmine Blast That Killed Thai Soldiers 'Not A Roadside Accident'

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Cambodian Prime Minister Hun Manet Says He Had Phone Calls With Trump And Malaysian Leader Anwar About Ceasefire

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Cambodia's Hun Manet Says USA, Malaysia Should Verify 'Which Side Fired First' In Latest Conflict

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Nasdaq Companies: Allergan, Ferrovia, Insmed, Monolithic Power Systems, Seagate Technology, And Western Digital Will Be Added To The NASDAQ 100 Index. Biogen, CdW, GlobalFoundries, Lululemon, ON Semiconductor, And Tradedesk Will Be Removed From The NASDAQ 100 Index

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Witkoff Headed To Berlin This Weekend To Meet With Zelenskiy, European Leaders -Wsj Reporter On X

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Russia Attacks Two Ukrainian Ports, Damaging Three Turkish-Owned Vessels

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[Historic Flooding Occurs In At Least Four Rivers In Washington State Due To Days Of Torrential Rains] Multiple Areas In Washington State Have Been Hit By Severe Flooding Due To Days Of Torrential Rains, With At Least Four Rivers Experiencing Historic Flooding. Reporters Learned On The 12th That The Floods Caused By The Torrential Rains In Washington State Have Destroyed Homes And Closed Several Highways. Experts Warn That Even More Severe Flooding May Occur In The Future. A State Of Emergency Has Been Declared In Washington State

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Trump Says Proposed Free Economic Zone In Donbas Would Work

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US President Trump: Thailand And Cambodia Are In A Good Situation

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State Media: North Korean Leader Kim Hails Troops Returning From Russia Mission

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          The Myanmar Military Is Losing Control

          Thomas

          Political

          Summary:

          Years of shifting resources away from the Myanmar army and changing requirements for its senior ranks have led to its current weaknesses on the battlefield. Are the junta fielding men of straw? A former ISEAS-Yusof Ishak Institute researcher weighs in.

          2023 may be recorded as the worst year experienced by the Myanmar army since the 1960s. The army's long history of counterinsurgency suffered a blow when several ethnic armed organisations and their allies in northern Shan state launched the "Operation 1027" offensive on Oct 27.
          This operation has changed the civil war landscape and narrative in Myanmar. Within days, the ethnic armed organisations claimed control of two key trade routes to China and as many as 147 outposts. The Myanmar army's losses were reportedly massive: Hundreds of troops including a senior commanding officer were killed, while many surrendered, and weapons and ammunition were seized from each army base's fall.
          Operation 1027's lightning speed and progress, despite the involvement of many players giving rise to coordination challenges, has raised questions about the Myanmar army's ability and leadership. Since the coup, the army has had to contend with a spiralling civil war across Myanmar, the breakdown of former ceasefire arrangements with several ethnic armed organisations, low troop morale, and even less public support.
          The widespread resistance to the coup was more the catalyst than the cause of this dysfunction, however. One contributing factor is years of policy error or neglect by Myanmar's Ministry of Defence, related to declining competency requirements for career advancement and the lack of investment in equipment and skills for infantrymen.
          Ceasefire Arrangements Since 1989
          The Myanmar army, with its high (arguably inflated) historical benchmarks for troop strength, boosted its role over decades by leveraging on counterinsurgency campaigns. However, the State Law and Order Restoration Council/State Peace and Development Council military regime that seized power in the 1988 coup embarked on a series of bilateral ceasefire arrangements with various ethnic armed organisations.
          Reasons for this included the experience of the Myanmar army in defending Myanmar's then capital Rangoon in the 1950s, which was threatened by several insurgencies, and heavy fighting with various ethnic armed organisations after the 1988 coup.
          In 1989, the State Law and Order Restoration Council forged ceasefire deals with powerful and formerly communist guerrillas such as the Kokang, Wa, and Mongla on the Myanmar-China border and with the Kachin Independence Organisation and the New Mon State Party between 1994 and 1995. These deals freed up the Myanmar army to focus on fighting two major rebel groups in Kayin and Shan states (along the Myanmar-Thai border).
          The surrender of druglord Khun Sa's Mong Tai Army in the mid-1990s and negotiations with the Karen National Union in the early 2000s added to the illusion of these ceasefires' "peacetime" impact.
          This is despite the fact that ceasefire deals were broken with the Kokang (2009) and the Kachin Independence Organisation (2011), especially after the State Peace and Development Council regime's proposal that the ceasefire groups transform into Border Guard Forces under Myanmar military control, which they roundly rejected.
          A former military officer from the 20th intake (graduating in 1978) of Myanmar's elite Defence Service Academy has commented that until 1989, "the army had continuously engaged in conventional warfare with the CPB (Communist Party of Burma) and army ability was the strongest in Asia after Vietnam". He stated that "Nowadays, the commanders don't have long experience in conventional warfare".
          Soldiers With Bamboo Baskets as Backpacks
          Such observations stem from the shift in the army's requirements for career advancement. The Myanmar military gradually prioritised the civilian side of the profession after the ceasefires in the 1990s, as many officers sought administrative rather than combat experience when seeking promotions.
          Though field experience is still necessary to advance to the position of division commander, moving up the rungs now requires a graduate degree from the National Defence College and staff officer experience at the Ministry of Defence. For higher positions (such as major-general and above), added criteria even included the officer's spouse's educational status.
          Even past battlefield experience is an outdated criterion. For example, State Administration Council (SAC) chief Senior General Min Aung Hlaing's biggest and only battle success was a 2009 snap offensive overrunning the Myanmar National Democratic Alliance Army (MNDAA, now of Operation 1027 fame) against former Kokang warlord and communist leader Peng Jiasheng. Other than that, Min Aung Hlaing mostly held operational command duties, as did his deputy Vice-Senior General Soe Win.
          Changes in military expenditure in the post-2011 transition also created an imbalance among the infantry, naval and air forces. Since 2006, Myanmar's military equipment expenditures have favoured the navy and air force, though the military's main challenge is counterinsurgency (that is, handled by the army).
          The military's share of the 2011 budget (at 23.6 per cent) – approved by the State Peace and Development Council before the transfer of power – was US$2 billion. This coincided with plans to expand the air force by purchasing MiG-29s while the navy was buying submarines from Russia, India and China.
          These big-ticket acquirements came at the expense of the army: Soldiers deployed to the frontlines now are reportedly using bamboo baskets as backpacks. What's more, the army's reported 522 ground-troop battalions are understaffed.
          Tarnished Credibility
          These past policy decisions are now coming home to roost. The Myanmar army keenly feels the loss of strongholds such as Mongko and Kunlong, which previous cohorts of soldiers had wrested from the CPB in 1967-68 and 1989. Recent Facebook updates by Operation 1027 forces show ethnic armed organisation soldiers marching into a Myanmar army base at Kunlong, where abandoned tanks, truck-mounted rocket launchers, and even Howitzers are visible.
          Even if the SAC and Myanmar army recognise the root causes for the current turn of events after Operation 1027, it may be a case of too little, too late. The Myanmar army's credibility has likely been tarnished, in the eyes of its supporters and detractors.

          Source: CNA

          Risk Warnings and Disclaimers
          You understand and acknowledge that there is a high degree of risk involved in trading. Following any strategies or investment methods may lead to potential losses. The content on the site is provided by our contributors and analysts for information purposes only. You are solely responsible for determining whether any trading assets, securities, strategy, or any other product is suitable for investing based on your own investment objectives and financial situation.
          Comments
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          Latest News on the Israeli-Palestinian Conflict (November 26)

          Thomas

          Palestinian-Israeli conflict

          Latest news on the Israeli-Palestinian conflict

          0:07
          Israeli sources reported that an anti-ballistic missile air defense system was launched over the city of Eilat and explosions were heard.
          0:09
          A statement issued by Hamas's Qassam Brigades said: "The Qassam Brigades have decided to postpone the release of the second batch of prisoners until the occupation complies with the terms of the agreement regarding the entry of aid trucks into the northern Gaza Strip and reaches the agreed standards for the release of prisoners.
          There is currently no verification from any source in Israel, we will monitor and update.
          0:26
          Hamas claimed in a statement that Israel had repeatedly violated the agreement:
          1. The scope of humanitarian assistance in the northern Gaza Strip is lower than the agreed scope; 2. The prisoners released from prisons yesterday were not released according to the agreed standards; 3. There are drone movements in the southern Gaza Strip; 4. Hamas claims Israeli violations Conduct that threatens the enforcement of the agreement (Barak Ravid)
          0:28
          Israeli news: 6 explosions in Eilat so far.
          1:09
          The Israeli military threatened Hamas: If Hamas does not release the kidnapped people in accordance with the agreement, we will resume operations at midnight today and deploy all ground troops in Gaza.
          1:14
          Hamas Quds Force - Camp Jenin: Our combatants engaged in violent clashes with invading occupation forces and vehicles around the camp, accompanied by heavy gunfire.
          1:58
          Senior Hamas official Osama Hamdan said: We informed the mediators that the Israeli side was not complying with the terms of the ceasefire agreement.
          2:07
          Palestinian media reporter: Qatar and Egypt are making great efforts to prevent the ceasefire agreement from breaking down.
          2:12
          BREAKING: Shooting by Israeli occupying forces in West Bank injures 5 people.
          2:33
          A delegation of Egyptian generals has arrived at the Rafah crossing to pressure Hamas to release a second group of hostages despite Israel's ceasefire violations.
          2:26
          Qatar's Ministry of Foreign Affairs: 39 Palestinian civilians will be released tonight in exchange for the release of 13 detainees.
          2:35
          Demonstrations near Netanyahu's residence, with settlers calling for his resignation.
          2:41
          Sources said Israeli aircraft were sighted in Khan Younis and Rafah in the southern Gaza Strip and in the central Gaza Strip.
          4:02
          After delays and through Qatari-Egyptian contacts with both sides, obstacles to the release of prisoners were overcome, 39 Palestinian civilians will be released tonight, while 13 Israeli hostages will leave Gaza, in addition to seven foreigners.
          4:32
          Following widespread outcry from Americans, Senator Elizabeth Warren came out against Meta's targeting of Palestinian content. She has proposed a draft law to make tech companies more transparent.
          4:55
          Hamas claimed: We handed over 13 Israelis and 7 foreign workers to the Red Cross.
          5:15
          The Red Cross confirmed to the MDA Director General that 17 abductees had been transferred to Israel, 13 of whom were Israelis and four were foreigners.
          The abductees underwent preliminary medical examinations by the Red Cross and, according to initial reports received by Israel, they are all in good condition.
          5:53
          Hamas claims: In response to the efforts of Turkish President Recep Tayyip Erdogan, the Islamic resistance movement Hamas has completed the release of Thai detainees in the Gaza Strip.
          7:03
          Demonstrations calling for a "truce" were held in the center of the Finnish capital Helsinki, with people holding Palestinian flags in support of Gaza and condemning the Israeli Defense Forces' aggression against Gazans.
          Latest News on the Israeli-Palestinian Conflict (November 26)_1
          9:07
          Israel has received a list of abductees to be released during the third phase.
          10:11
          Even after their release, more than 8,000 Palestinians remain in Israeli detention, including more than 2,200 administrative detainees held without charge or trial.
          Latest News on the Israeli-Palestinian Conflict (November 26)_2
          11:35
          Irish President Michael D Higgins, whose role is largely ceremonial, has also been critical of Israel, accusing it of reducing international law on the protection of civilians to "tatters".
          14:07
          Countries that supply oil to Israel:
          Latest News on the Israeli-Palestinian Conflict (November 26)_3
          14:19
          As the humanitarian pause enters its third day, more tragedy continues to unfold in Gaza; residents discovered that the two main schools in the southern Gaza village of Khuza'a had been flattened by Israeli airstrikes.
          15:41
          Hundreds of Palestinians queued at a gas station in Rafah, south of the Gaza Strip, as small amounts of fuel were allowed into the besieged enclave during the truce.
          Latest News on the Israeli-Palestinian Conflict (November 26)_4
          16:10
          Farmers in the occupied West Bank say they face near-daily incursions and violence from Israeli settlers to the point where they live in fear of having their homes and land stolen.
          They have also witnessed violence in nearby urban areas, such as the city of Jenin and refugee camps where Israeli forces have stepped up attacks, killing 10 people and injuring 20 others in just one week.
          17:04
          Tel Aviv official: Hamas' survival means our defeat
          Zionist regime's education minister: If Hamas stands up at the end of the war, it means we are seriously defeated.
          17:36
          Hamas's military terrorism wing confirmed:
          Ahmed Andour, commander of the northern Gaza Strip, and Ayman Siam, commander of the rocket array, were killed in an Israeli attack about a week and a half or two weeks ago.
          18:00
          Latest News on the Israeli-Palestinian Conflict (November 26)_5 In Jenin, north of the occupied West Bank, thousands of Palestinians attended the funeral of five Palestinians killed by Israeli occupying forces in the city last night.
          19:50
          The Qatari delegation, led by Qatari Assistant Foreign Minister Lorva Khater, arrived in the Gaza Strip through the Rafah crossing, the first international delegation to enter since the outbreak of Israeli aggression.
          20:17
          Former U.S. National Security Advisor John Bolton: “I must admit that Hamas has won a major victory against Israel.
          20:24
          Joe Biden's administration is concerned about the possibility of journalists exposing the extent of Israeli destruction in Gaza during a temporary humanitarian truce, US daily Politico reported.
          22:47
          Hamas: In response to President Putin’s efforts and out of appreciation for Russia’s stance in support of the Palestinian issue, we released a prisoner holding Russian citizenship.

          Article source: "The Gift of the Beautiful Fairy" WeChat public account

          Risk Warnings and Disclaimers
          You understand and acknowledge that there is a high degree of risk involved in trading. Following any strategies or investment methods may lead to potential losses. The content on the site is provided by our contributors and analysts for information purposes only. You are solely responsible for determining whether any trading assets, securities, strategy, or any other product is suitable for investing based on your own investment objectives and financial situation.
          Comments
          Add to Favorites
          Share

          Why Neither Israel nor Hamas Can Win the War and A Viable Palestinian State Is Now a Pipe Dream

          Cohen

          Economic

          Palestinian-Israeli conflict

          Initial sympathy for Israel arising from the vicious attacks by Hamas on Oct 7 has shifted decisively to criticism of it for perpetrating the mounting destruction of civilian infrastructure and deaths and suffering of Palestinians, especially children.
          Mounting international pressure has led to Israel and Hamas agreeing to a four-day humanitarian pause and a hostage-for-prisoner swap. This is only temporary.
          Fighting is expected to resume thereafter, together with efforts by key players including Qatar, Egypt, and the United States to press both sides to release all the hostages and end the war.
          Most governments and commentators have expressed the view that the Israelis have the right to self-defence under the circumstances, particularly in view of the terrorist actions perpetrated by Hamas.
          But this does not absolve the Israel Defense Forces of the responsibility to observe international codes of humanitarian behaviour designed to protect innocent civilians.
          Prospects for Victory
          Israel cannot win militarily. Even if Hamas is destroyed, other Palestinian terrorist groups, such as Palestine Islamic Jihad, will take over.
          The Palestinian threat is an existential problem for Israel that will fester beyond the current war.
          Hamas cannot win either. Although its popularity with Palestinians and Muslims all over the world has soared, it will not be allowed to rule Gaza.
          A post-war plan to replace it with the Palestinian National Authority is currently being brokered by the United States, Israel, Egypt and Saudi Arabia, among others.
          Hamas has delayed, but not derailed the emerging co-operation between the US, Israel and Saudi Arabia.
          The Gulf states see Iran's hand in the current outbreak. On the ground, Hamas has nominal support from Palestine Islamic Jihad, Hezbollah in Lebanon, the Houthis in Yemen and terrorist groups in Iraq.
          These are all Iranian proxies and opposed to the Gulf monarchies as well.
          Once the current fighting ceases and after a decent interval, the Saudis will move on to recognise Israel.
          Before that, they will work towards securing concessions from Israel and security guarantees from the US, all of which will amount to a de facto alliance.
          While there are no clear winners from the war, what is certain is that the losers are the 2 million Palestinians in Gaza.
          Likelihood of a regional war?
          The US has deployed formidable military assets, including two aircraft carrier groups and a nuclear submarine, to deter threats of a wider regional war. This has proven successful so far.
          Hezbollah and Iran's other proxies have escalated their attacks on Israel from their respective strongholds, but with limited effect for now.
          Iran itself, bogged down with its own internal problems, will not want to be involved in a major war. But Iran will continue to use its proxies to foment regional instability.
          The US remains the dominant player in the region, but it is not all-powerful.
          Washington will continue to provide financial and material support to Israel, but it will also try to curb Israel's military excesses besides focusing on getting all the hostages released and a longer humanitarian pause implemented.
          Although self-sufficient in its energy needs, the US will not allow Saudi oil reserves or Qatari natural gas deposits to fall into the hands of unfriendly governments such as Iran, Russia and militant groups.
          Consequently, Washington will not abandon its role as the security guarantor of its Gulf allies.
          What is of concern to the Saudis is whether this guarantee extends to the preservation of Al Saud rule. Hence, a Saudi understanding with Israel serves as an added insurance policy against Iran, as well as a source of much-needed technical and managerial expertise.
          China's stock in the region has grown, given its economic clout and diplomatic foray that capitalised on the rapprochement between Iran and Saudi Arabia.
          China's interests in the region are primarily energy security and economic. Its leaders are astute enough to want good relations to remain with Saudi Arabia and its allies on one side, and Iran on the other.
          They have no desire to become embroiled in the region's intractable quarrels.
          What price a permanent peace?
          A viable Palestinian state is now a pipe dream.
          The two-state solution which recognises Israel's right to exist alongside a Palestinian state does not resolve a fundamental problem of geography, that is, the Gaza Strip at one end and the West Bank on the other, with Israel in between through which a land bridge runs linking the two Palestinian entities.
          A unified Palestinian state would mean the de facto partition of Israel, which Israel will never accept. This leaves the current separation between Gaza and West Bank as the best-case reality.
          For such a divided Palestinian state to be independent and to prosper, it must build on good relations with its powerful Israeli neighbour.
          Sadly, the latest spate of fighting will only reinforce the animosity, distrust and righteous indignation between Israelis and Palestinians.
          Both sides believe they are legally and morally right with God on their side, making prospects for lasting peace in the coming years highly unlikely.
          The harsh reality is that neither Israel nor Palestine wants a two-state solution.
          Every Palestinian leader, whether it is Mahmoud Abbas, President of the Palestinian National Authority, or his successors, knows that any peace settlement will entail making compromises and accepting terms that will not fully satisfy the Palestinian people.
          Zionist extremists on the Israeli side would also be opposed to a two-state solution.
          Any Palestinian or Israeli leader who signs on to a two-state solution is likely to risk assassination by extremists.
          There is no possibility that Israel, the US and many of the Arab states will accept a return to Hamas rule in Gaza.
          Neither does Israel want to permanently occupy Gaza, which will remain a hotbed of terrorist violence, unless it can expel all the Palestinians.
          The likely outcome after the fighting has ceased is the return of the Palestinian National Authority to Gaza, supported by a multi-national force with an Arab component.
          But it will be an almost impossible task for the Palestinian National Authority to demilitarise and deradicalise the Gaza Strip.
          For now, the international community will continue to push for a two-state solution as the most acceptable diplomatic and political option to the Israel-Palestine conflict.
          There is no hope of another process to supersede the Oslo Peace Accords which delivered the two-state solution almost 30 years ago.
          At the same time, Prime Minister Benjamin Netanyahu and his right-wing partners in the present Israeli government will not condone a Palestinian state in God's promised land.
          Israeli objection to anyone else's proposal on the status of Jerusalem seems unshakeable. The prospects for progress on the two-state solution or other diplomatic initiatives are, at best, dim.

          Source: CNA

          To stay updated on all economic events of today, please check out our Economic calendar
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          The Secular Threat of Inflation and Debt

          Damon

          Economic

          In November 1923, a century ago, Germany's post-war inflation reached its peak. One kilogram of rye bread was priced at 223 billion marks, and beef prices had soared past the trillion marks.
          Post-war Germany was facing exorbitant reparation demands imposed by the Treaty of Versailles – less a peace treaty than a vengeful arrangement dictated by the victors, intended to perpetually weaken the German state. Ironically, it set the stage for the rise of the Nazis and the subsequent outbreak of World War II.
          Lessons from Germany's past
          The already fragile German government had to contend not only with war debts but also with these inflated reparation demands. By 1922, Germany could no longer adhere to the reparation schedule. Consequently, France and Belgium invaded and occupied Germany's crucial industrial Rhine-Ruhr region. The German government's only form of protest was to endorse passive resistance and ensure payment to striking workers. To pay these wages, along with the ongoing reparation payments, Germany had to print money, triggering a tsunami of inflation.
          The extreme situation necessitated a total monetary reform and a restructuring of reparation payments. Unlike Great Britain and France, the United States was notably supportive, and through the Dawes Plan Germany achieved stabilization. However, this came at a cost: all Germans lost their savings.
          This scenario exemplifies the severe consequences of government overspending. In Germany's defense, it must be acknowledged that the government was dealing with an unprecedented situation, and the overspending was largely imposed externally.
          Yet, this extreme case serves as a stark warning for contemporary times. Today, many governments engage in voluntary overspending, often underpinning their actions with frameworks like Modern Monetary Theory, while disregarding mathematical realities. Despite warnings, institutions like the European Central Bank overlooked the looming threat of inflation. Unforeseen events, such as Covid-19 and war, have transformed what was once only inflation in asset values into a broader inflationary trend affecting the general economy. While inflation may not be rampant, it still erodes purchasing power. It is critical to remember that inflation is cumulative: a three percent inflation rate this year adds to the inflation rates of previous years, continuously affecting the economy and especially the purchasing power of society.
          A cautionary tale for modern economies
          With soaring government debts and ongoing deficits, institutions like the ECB are hesitant to sufficiently raise interest rates to combat inflation. Such a move could increase the cost of debt and potentially hinder the already very modest growth rates.
          We find ourselves in what can be described as an inflationary trap. This predicament might be concealed temporarily, but persistent and excessive government overspending lays the foundation for further inflation. New fiscal stimuli and squandering are often packaged attractively, as seen in the U.S. with the ironically named Inflation Reduction Act, or in Germany with the term Sondervermogen, or special assets. (Labeling additional debt as "special assets" is a misnomer, to say the least.)
          The current minor decrease in inflation should not be a source of complacency. Tightening measures, particularly in the U.S., are having an impact. However, it is important to recognize that inflation persists, and the current reduction is largely due to falling energy prices and eased trade tensions. It is unsettling that wage-price spirals have emerged in several European countries.
          In response to these challenges, populist rhetoric often identifies inequality as a culprit, leading to calls for wealth redistribution and slogans like "make the rich pay." Such approaches, however, will exacerbate the situation by setting the wrong economic incentives.
          Tax systems are becoming increasingly byzantine, leading to arbitrary and unpredictable tax collection and enforcement. This complexity results in a significant tax burden.
          Inflation, high debt levels and excessive taxation are deeply interconnected. Deficit spending typically fuels inflation. Both inflation and debt ultimately strain citizens and are indicative of weak and irresponsible governance.
          In today's world, there are no valid excuses for such self-destructive policies. One is reminded of Lenin's assertion that the best way to achieve the dictatorship of the proletariat is to crush the bourgeoisie between the millstones of inflation and taxation.

          Source: GIS

          To stay updated on all economic events of today, please check out our Economic calendar
          Risk Warnings and Disclaimers
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          Will RBNZ Pour Cold Water on Rate Cut Expectations?

          Thomas

          Economic

          Central Bank

          • Since the last RBNZ meeting, data have been coming on the weak side
          • Investors see no more hikes and expect 40bps worth of cuts for 2024
          • But the RBNZ is unlikely to satisfy market bets
          • The meeting is scheduled for Wednesday, at 01:00 GMT

          Data points to softening economic activity

          At its latest gathering, the Reserve Bank of New Zealand (RBNZ) held its Official Cash Rate (OCR) steady at 5.5%, noting that interest rates are constraining economic activity and are reducing inflationary pressures as required. Officials also added that there is a near-term risk that activity and inflation do not slow as much as needed, and that’s why the policy rates should stay at restrictive levels for a sustained period of time.

          Since then, data have been pointing to further softening of economic activity, with retail sales shrinking 0.8% q/q in Q3 after dropping 1.0% in Q2, and the business PMI for October sliding to 42.5 from 45.3. What’s more, the unemployment rate increased further to 3.9% from 3.6% during Q3 and the CPI slowed to 5.6% y/y from 6.0%. All these numbers allowed investors to continue believing that this tightening crusade is over and to pencil in around 40bps worth of rate cuts for next year.

          But upside risks to inflation unlikely to result in a dovish RBNZ

          The Bank’s upcoming gathering is scheduled for Wednesday, with analysts agreeing with the market that officials are most likely to keep their hands off the hike button. Therefore, the attention is likely to fall on the Bank’s new macroeconomic projections and any clues on how they are planning to proceed with monetary policy in 2024.

          Given that inflation is still nearly double the upper bound of the RBNZ’s 1-3% target range, and that, although cooling, the RBNZ’s own expectations continue to suggest that inflation will stay above that bound in 12 months, officials are unlikely to affirm market expectations and revise lower their OCR projections.

          What’s more, it will be interesting to see whether policymakers will incorporate into their forecasts the implications of a new government for the macroeconomic outlook. An official agreement has yet to be signed, but the new coalition is more likely to be led by the National Party, which promised less spending than the previous Labor-led government, but also tax cuts, which is an inflationary policy. It also called for a change in how the RBNZ conducts policy, arguing that the dual mandate should be dropped and suggesting the adoption of a stricter inflation targeting. This means that if the Bank switches to a 2% objective like other major central banks, policy may need to stay restrictive for longer than previously estimated to achieve that target. According to the RBNZ’s inflation projections, inflation would not be at 2% even in 2 years.

          Kiwi may have room to gain more

          Having all these variables in mind, even if officials lower their short-term inflation projections based on the latest data releases, the longer-term outlook is unlikely to be changed much, and they will most likely continue to suggest that interest rates will finish 2024 at the current 5.5% level. Compared to the market’s own implied path, this could be interpreted as a relatively hawkish hold and could prove positive for the New Zealand dollar, which has been outperforming its US counterpart lately on speculation that the Fed may need to cut interest rates by around 90bps next year.

          Apart from monetary policy, the kiwi is also driven by the broader risk-appetite and developments surrounding the Chinese economy, New Zealand’s main trading partner. The market expectations regarding the Fed’s future course of action have triggered a wave of market euphoria, fueling the latest rally in stocks, and that’s why the risk-linked kiwi and aussie gained more than other currencies against the dollar. On top of that, despite the major problems facing the Chinese economy, the latest data releases are suggesting that the world’s second largest economy may be bottoming out, which is another plus for the kiwi and its neighboring aussie.

          From a technical standpoint, kiwi/dollar has been printing higher lows and higher highs since the October 26 bottom, while today, it poked its nose above the crossroads of the 200-day exponential moving average (EMA) and the 0.6060 key zone. If the week closes above that hurdle, then the bulls may decide to climb towards the 0.6130 barrier, marked by the high of August 4, the break of which could carry larger bullish implications.

          For the outlook to darken again, kiwi/dollar may need to slide and close below the 0.5940 barrier, a move that could pave the way towards the next support zone, at around 0.5860.

          Article Source: ACTIONFOREX

          To stay updated on all economic events of today, please check out our Economic calendar
          Risk Warnings and Disclaimers
          You understand and acknowledge that there is a high degree of risk involved in trading. Following any strategies or investment methods may lead to potential losses. The content on the site is provided by our contributors and analysts for information purposes only. You are solely responsible for determining whether any trading assets, securities, strategy, or any other product is suitable for investing based on your own investment objectives and financial situation.
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          Why Carbon Capture Is No Easy Solution to Climate Change

          Kevin Du

          Energy

          Technologies that capture carbon dioxide emissions to keep them from the atmosphere are central to the climate strategies of many world governments as they seek to follow through on international commitments to decarbonise by mid-century.
          They are also expensive, unproven at scale, and can be hard to sell to a nervous public.
          As nations gather for the 28th United Nations climate change conference in the United Arab Emirates at the end of November, the question of carbon capture's future role in a climate-friendly world will be in focus.
          Here are some details about the state of the industry now, and the obstacles in the way of widespread deployment.
          Forms of Carbon Capture
          The most common form of carbon capture technology involves capturing the gas from a point source like an industrial smokestack.
          From there, the carbon can either be moved directly to permanent underground storage or it can be used for another industrial purpose first, variations that are respectively called carbon capture and storage (CCS) and carbon capture, utilisation, and storage (CCUS).
          There are currently 42 operational commercial CCS and CCUS projects across the world with the capacity to store 49 million metric tonnes of carbon dioxide annually, according to the Global CCS Institute, which tracks the industry. That is about 0.13 per cent of the world's roughly 37 billion metric tonnes of annual energy and industry-related carbon dioxide emissions.
          About 30 of those projects, accounting for 78 per cent of all captured carbon from the group, use the carbon for enhanced oil recovery (EOR), in which carbon is injected into oil wells to free trapped oil. Drillers say EOR can make petroleum more climate-friendly, but environmentalists say the practice is counter-productive.
          The other 12 projects, which permanently store carbon in underground formations without using them to boost oil output, are in the US, Norway, Iceland, China, Canada, Qatar, and Australia, according to the Global CCS Institute.
          Another form of carbon capture is direct air capture (DAC), in which carbon emissions are captured from the air.
          About 130 DAC facilities are being planned around the world, according to the International Energy Agency (IEA), although just 27 have been commissioned and they capture about 10,000 metric tonnes of carbon dioxide annually.
          The US in August announced US$1.2 billion in grants for two DAC hubs in Texas and Louisiana that promise to capture 2 million metric tonnes of carbon per year, although a final investment decision on the projects has not been made.
          High Costs
          One stumbling block to the rapid deployment of carbon capture technology is cost.
          CCS costs range from US$15 to US$120 per metric tonne of captured carbon depending on the emissions source, and DAC projects are even more expensive, between US$600 and US$1,000 per metric ton, because of the amount of energy needed to capture carbon from the atmosphere, according to the IEA.
          Some CCS projects in countries like Norway and Canada have been paused for financial reasons.
          Countries including the US have rolled out public subsidies for carbon capture projects. The Inflation Reduction Act, passed in 2022, offers a US$50 tax credit per metric tonne of carbon captured for CCUS, US$85 per metric tonne captured for CCS, and US$180 per metric tonne captured through DAC.
          Although those are meaningful incentives, companies may still need to take on some added costs to move CCS and DAC projects ahead, said Benjamin Longstreth, global director of carbon capture at the Clean Air Task Force.
          Some CCS projects have also failed to prove the technology's readiness. A US$1 billion project to harness carbon dioxide emissions from a Texas coal plant, for example, had chronic mechanical problems and routinely missed its targets before it was shut down in 2020, according to a report submitted by the project's owners to the US Department of Energy.
          The Petra Nova project restarted in September.
          Location, Location, Location
          Where captured carbon can be stored is limited by geology, a reality that would become more pronounced if and when carbon capture is deployed at the kind of massive scale that would be needed to make a difference to the climate.
          The best storage sites for carbon are in portions of North America, East Africa, and the North Sea, according to the Global CCS Institute.
          That means getting captured carbon to storage sites could require extensive pipeline networks or even shipping fleets – posing potential new obstacles.
          In October, for example, a US$3 billion CCS pipeline project proposed by Navigator CO2 Ventures in the US Midwest – meant to move carbon from heartland ethanol plants to good storage sites – was cancelled amid concerns from residents about potential leaks and construction damage.
          Companies investing in carbon removal need to take seriously community concerns about new infrastructure projects, said Simone Stewart, industrial policy specialist at the National Wildlife Federation.
          "Not all technologies are going to be possible in all locations," Stewart said.

          Source: Reuters

          Risk Warnings and Disclaimers
          You understand and acknowledge that there is a high degree of risk involved in trading. Following any strategies or investment methods may lead to potential losses. The content on the site is provided by our contributors and analysts for information purposes only. You are solely responsible for determining whether any trading assets, securities, strategy, or any other product is suitable for investing based on your own investment objectives and financial situation.
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          Dutch Election Result Brings Risk of More Eurosceptic Policies

          ING

          Economic

          Preliminary results from the Dutch parliamentary election are in. Although the results are not yet official, it is already clear that the populist conservative PVV of Geert Wilders has won with a large lead. Today, the speaker of the House of Representatives (Tweede Kamer) will consult the leaders of the political groups on the appointment of a 'scout' (verkenner) who is to investigate the feasibility of different coalitions. On 6 December, the new House of Representatives will convene for the first time. Shortly after that, a debate will take place on both the outcome of the elections and on a report to be provided by the 'scout'.
          For now, it seems likely that a coalition of the PVV, the liberal-conservative VVD, Pieter Omtzigt's NSC and the farmers' and citizens' BBB is the option that will be looked at first. Given some reluctance to cooperate with the PVV, such a coalition is far from certain, however. As this constellation is now often mentioned by political commentators, we will now look at the general possible direction of a select number of (economically and internationally relevant) policies based on the manifestos of these four parties.
          Domestic policies: high uncertainty about outcomes
          Of the four parties, only the VVD participated in an exercise by the CPB (Netherlands Bureau for Economic Policy Analysis) which looked at the goals in manifestos and analysed their fiscal and economic effects. So there is quite some uncertainty about what policies and effects can be expected for the economy if PVV, VVD, NSC and BBB were to govern together.
          Domestic fiscal policy more expansionary over time due to higher spending desires
          What is clear, however, is that these parties have a lot of goals, which could potentially lead to a lot of additional public spending, such as on health care. Simultaneously, parties want to boost household income, especially for those in poverty, which would require lower taxes and higher social security spending. This raises the fiscal deficit.
          All of these four parties want to be strict on fiscal deficits within the eurozone and VVD, NSC and BBB have all stated they want to adhere to European fiscal rules, implying a budget deficit below 3% of GDP. Yet, based on detailed calculations, only the VVD seems to be heading towards an actual budget deficit of just below 3% of GDP in 2028, if its manifesto were to be implemented. This means that the other parties would have to make some concessions, as the current government leaves behind a deficit of 3.6% in 2028. At this point in time, however, it is hard to pinpoint exactly which policy intentions the four parties would scale down in order to achieve this.
          Overall, we expect fiscal policy to be considerably expansionary over time, with the deficit increasing considerably compared to its current level. The impact on the economy would be stimulative, which would likely lead to more labour demand. Given the current strains in the labour market, we expect this to result in more demand for foreign workers.
          Restriction on migration
          The parties, however, agree on restricting immigration. In many cases, this applies to restricting the number of refugees and migrant workers, but there are also proposals for restricting the immigration of foreign students and family members. The PVV wants to restrict labour migration from within the EU.
          Disagreement on climate change policies, but not necessarily a complete overhaul
          VVD, NSC and BBB subscribe to international climate goals (the Paris Agreement and/or EU goals) and propose policies to mitigate climate change, yet they do not seem to be aiming for even higher goals than European legislation requires domestically. The PVV wants to cut spending on climate mitigation policies entirely and only leaves the door open for climate adaptation policies. NSC wants to adopt more cost-efficient policies, with lower subsidies and more pricing and norms. This, and the fact that it was not among the main priorities in PVV's election campaign, probably means that this four-party coalition is not likely to abolish all existing climate policies. European regulation will also still apply, so we expect that this possible coalition could be committed to achieving international climate goals, although with a view to reducing the cost.
          More defence spending, but possibly less favourable for Ukraine
          VVD, NSC and BBB are in favour of increasing defence spending to the NATO objective of 2% of GDP and continuing to support Ukraine. The PVV takes a more nationalist approach toward defence, by wanting to stop supporting Ukraine with money and weapons and by arguing in favour of using the army for border patrols in order to reduce the immigration of refugees. PVV, VVD and NSC are against an EU army. Yet, VVD, NSC and BBB are in support of European military cooperation.
          Less official development aid
          It is quite likely that this possible coalition wants to reduce spending on official development aid. The PVV wants to stop official development aid entirely, while the VVD is considering lowering spending. BBB wants to spend the same as the EU will have spent in 2023 (as a percent of GDP). NSC is not explicit about its desired degree of spending on ODA, but it stresses the need for impactful spending, a focus on a limited number of countries, sustainable growth and a connection with migration policy.
          More euroscepticism
          The government's stance is likely to become more sceptical towards the EU and European integration with a PVV, VVD, NSC and BBB coalition. That is one of the main takeaways from our analysis. The PVV seems to be most sceptical. It wants a binding referendum on an exit from the EU, and before then, to reduce financial transfers and return sovereignty to the Netherlands. The BBB would prefer to go back to a previous version of the EU that was more focused on a common European market (European Economic Community), is sceptical about fiscal transfers and has a preference for a northern version of the euro. However, NSC is in favour of cooperating on a European level on issues like the euro, migration, climate and Ukraine, but wants to prevent a transfer union and mutual debt, and also wants to use Dutch opt-outs from European legislation more often. The VVD is still in favour of legislation towards more harmonisation of the European single market, but is sceptical about more spending at the European level and argues for a return to more fiscal discipline of eurozone member states. So, quite some scepticism about Europe, but given the overall positive public opinion on Europe within the Netherlands and the stance of NSC and VVD, we rule out a significant move on the euro or Nexit.
          More opposition against changes to the Stability and Growth Pact brings uncertainty for Dutch stance in reform discussions
          NSC, BBB and VVD all seem to be in favour of a return to the 3% and 60% deficit norms of the Stability and Growth Pact. It is therefore very doubtful whether such a four-party coalition, with the most likely exception of VVD, would support the changes to the Stability and Growth pact that are currently on the table. The current caretaking government left more room for such reforms that would allow more country-specific flexibility.
          Smaller EU budget and EU enlargement less likely
          VVD, NSC and BBB propose a reduced or frozen EU budget, while it seems likely that PVV would also vote along these lines. The PVV is against the enlargement of the EU, while VVD, NSC and BBB do not seem to oppose the addition of new member states as long as they strictly comply with the Copenhagen conditions (with the exception of the NSC, which is ruling out Turkey).
          Conclusion: Policy uncertainty 'higher for longer'
          The formation of the coalition is likely to take a very long time, and national policy ambitions pushing up against the limits of the government budget will be a key hurdle. If the negotiations fail, there may be an effort to form a more centrist coalition of the progressive green left/social democrats Groenlinks-PvdA with VVD, NSC and centrist liberal democrats D66, which will also be difficult to reach agreement. If no coalition is formed, new elections are the only remaining option.
          Meanwhile, it is unclear which stance the caretaking Dutch government will take as it enters the Ecofin discussions on the Stability and Growth Pact on 8 December and the European Council on 14 and 15 December on matters like enlargement, Ukraine and the financial framework. We expect to find out in the next two weeks.
          To stay updated on all economic events of today, please check out our Economic calendar
          Risk Warnings and Disclaimers
          You understand and acknowledge that there is a high degree of risk involved in trading. Following any strategies or investment methods may lead to potential losses. The content on the site is provided by our contributors and analysts for information purposes only. You are solely responsible for determining whether any trading assets, securities, strategy, or any other product is suitable for investing based on your own investment objectives and financial situation.
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