Norway's water reserves have been at an all-time low for more than a decade.
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| [Energy Crisis 2021] |
The financial markets are still being shaken by the energy crisis, which is mostly hurting Europe. According to Bloomberg, the price contagion is spreading to Northern nations due to a combination of poor water supplies and high-cost gas, which has already claimed many victims among countries - notably Italy - that rely heavily on this raw resource to power their facilities. The levels of water reserves in Norway are at their lowest in almost a decade, according to the agency, and the operator of the networks, Statnett, has issued a warning to traders: there are insufficient supplies to deliver electricity to both the United Kingdom and Germany.
With the North of the globe approaching winter in these extreme conditions, China has ordered its operators to ensure raw material supplies at all costs, and India, according to the Financial Times, has coal reserves that only last a few days, the markets are looking for the winners and losers in this situation. If you look at the index of big producers, which includes companies like Cabot Oil & Gas Corp. and ConocoPhillips, it has risen over 10% in the last month. Utilities with commodities firms, on the other hand, reversed direction and fell to the bottom of the performance rankings.
The OPEC summit, which begins on Monday, is expected to boost oil production levels in order to avoid the price race infecting the barrel, causing inflation, and therefore sending growth out of bounds. The United Nations Annual Conference on Climate Change, which begins on October 31 in Glasgow, will restart the discussion on the future of global energy (COP26).
The term "inflation" quickly conjures up images of central banks ready to normalize monetary policy. The number for the week highlighted in red for them, as well as for the markets in general, is that of the US labor market in September, which is due on Friday, along with the trend in unemployment benefits. Meanwhile, inflation is being closely monitored.
Looking at central banks, the New Zealand central bank is expected to raise interest rates for the first time since 2014. On October 4, the president of the Federal Reserve Bank of St. Louis, James Bullard, will give a lecture on the economy, among the so-called "hawks" advocating for tapering, and on October 7, the president of the Federal Reserve Bank of Cleveland, Loretta Mester, will speak on inflation and employment. The quarterly bulletin will be released on the 8th of each month by the Bank of England.
The Eurogroup will meet on October 4th, with Christine Lagarde, the president of the European Central Bank, and Fabio Panetta, a member of the executive committee. The Governing Council of the European Central Bank met on Wednesday, but not to discuss monetary policy. Tuesdays and Wednesdays are free days. Ministerial Council of the Organization for Economic Cooperation and Development (OECD). On Thursday and Friday, the B20 will have its final summit. G20 Innovation League on Saturday and Sunday. On Tuesday, the most important macroeconomic data will be released: the ISM services manufacturing index from the United States, which is projected to decline even more. On Friday, Caixin Pmi Servizi will arrive from China to assess if the increase has been confirmed.
The stock exchanges in China will be closed for the holidays until October 7th. Other macroeconomic statistics will be released during the week. The Sentix index will be released on Monday, with statistics on investor confidence in the Eurozone in October, the Spanish unemployment rate, and US industrial and durable goods orders in August. On Tuesday, Eurozone producer prices for August were released, as well as the Eurozone manufacturing PMI for September, as well as those for France and Germany. The September services SMEs for Spain and France will be added, with the latter including data on August industrial production. The composite PMI and the purchasing managers' index in services are both from the United Kingdom. The trade balance for August will come from the United States.
The construction purchasing managers index comes from the United Kingdom. On Thursday, Germany's industrial output figures for August will be released. The German trade balance will be released on Friday. The September 5 services will be available in Italy, while the August retail sales will begin on the 7th of the month. Whirlpool has meetings at the Ministry of Economic Development on Wednesdays and Fridays.
On the national level, there are two 'hot' fronts: Nadef, which is also the location of the budget maneuver, and ITA, which is set to take off in mid-month. Meanwhile, Nadef arrives at Parliament, where hearings on the joint budget committees of the House and Senate are set to begin on Tuesday. The contractual deadline for proposals for the Alitalia brand, on the other hand, will expire on Monday, while Deputy Minister Laura Castelli will be heard in Parliament on the airline's new strategy the following day.