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January 10th - According to foreign media reports, three people familiar with the classified assessments stated that the CIA has provided a pessimistic picture of Cubas economic and political situation, but these assessments do not offer a clear basis for President Trumps prediction last week that Cuba is "on the verge of collapse" following military action in neighboring Venezuela. The CIA believes that key sectors of the Cuban economy, such as agriculture and tourism, are under immense pressure due to frequent power outages, trade sanctions, and other issues. The potential loss of oil imports and other supporting resources from Venezuela could further complicate the governance of the long-ruling government. However, the sources also pointed out that the recent CIA assessments did not reach a definitive conclusion on whether the deteriorating economic situation would jeopardize the stability of the Cuban government.On January 10th, the Chongqing Artificial Intelligence Bay Area officially launched its construction. Located in Nanan District and Chongqing Economic and Technological Development Area of Chongqing, the bay area serves as an ecological platform, collaborating with the Chongqing Artificial Intelligence Academy and the Chongqing General Artificial Intelligence Research Institute to form an integrated innovation consortium encompassing government, industry, academia, research, application, and finance. It aims to become a landmark achievement of the national artificial intelligence innovation and development pilot zone and innovative application pilot zone. The core objective of the bay area is to build an open, collaborative, and efficient artificial intelligence industry ecosystem and application platform, serving as a carrier, testing ground, and accelerator for driving the deep integration of AI technology with various industries.Iraqi Oil Minister: An oversupply is expected in the oil market following the events in Venezuela.Iraqs oil minister: Iraqs current oil production is approximately 4.286 million barrels per day.The Iraqi oil minister said that negotiations are underway with Chevron (CVX.N) regarding the West Qurna 2 oil field.

GBP/USD continues to trade below 1.2000 as risk aversion increases, with the US ISM PMI in focus

Alina Haynes

Jan 04, 2023 14:53

GBP:USD.png 

 

In the early Asian session, the GBP/USD pair has moved below the psychological support of 1.2000. Due to a risk-averse market mentality, the pound has been unable to surpass 1.2000. A dramatic fall in investors' risk appetite prior to the release of the United States ISM Manufacturing PMI data and the Federal Reserve's (FedDecember) monetary policy minutes boosted the United States Dollar.

 

The S&P 500 remained on a downward trajectory on Tuesday, showing the market participants' continued aversion to risk. The US Dollar Index (DXY) achieved a two-week high of roughly 104.40 after recovering strongly from 103.

 

Investors are afraid that the Federal Reserve (Fed) may be compelled to adopt additional policy tightening in order to confront persistent inflation. Bill Dudley, a Bloomberg analyst, identified three focal points for the Fed in CY2023. The labor market's tight conditions and low unemployment rate are the primary driver of wage inflation. Second is the underinvestment in the oil and gas sector, which could worsen inflation given Russia's ability to weaponize its control over major oil supplies. The third aspect is the performance of the budget deficit, which is projected to reach approximately 5% of Gross Domestic Product (GDP) in 2023.

 

In the meantime, investors await the release of the US ISM Manufacturing PMI, which is expected to be lower at 48.5 compared to the previous release of 49.0. While the New Orders Index is expected to be higher at 48.1, compared to the previous release's 47.2, the data is expected to be down at 47.2.

 

The diminishing appetite for corporate debt raises red flags for the United Kingdom's economic outlook. 70% of UK CFOs believe credit to be "expensive" in light of the Bank of England's (BoE) most severe tightening policies in more than three decades, according to a quarterly poll conducted by Deloitte CFP and cited by Reuters. In the meantime, the British government has withdrawn the obligation for Chinese newcomers to undergo Covid testing.


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