The most important events and reports on the economy, central banks and politics from the Dow Jones Newswires program
Scholz calls for more speed in the energy transition
Chancellor Olaf Scholz (SPD) has called for more speed in the expansion of renewable energies and the conversion to climate neutrality in view of the energy transition. At the same time, after a conversation with the representatives of the so-called “Alliance for Transformation” in the Chancellery, he was confident that climate protection and affordable energy are not mutually exclusive. After the meeting, the chairwoman of the DGB referred to the need for affordable energy so that Germany can remain competitive.
US job growth beats forecasts in May – problem for the Fed
US job growth significantly exceeded expectations in May. The strong data complicates the Federal Reserve’s fight against high inflation. As reported by the US Department of Labor, 339,000 additional jobs were created in the private sector and the state. Economists polled by Dow Jones Newswires had expected an increase of just 190,000. The figures for the two previous months were revised upwards by a cumulative 93,000 jobs: the ministry reported a job increase of 294,000 for April (provisional: 253,000) and for March of 217,000 (provisional: 165,000).
DIW boss Fratzscher: The ECB should give up its inflation target
According to Marcel Fratzscher, President of the German Institute for Economic Research (DIW), the European Central Bank (ECB) should give up its inflation target of 2 percent. In an article for the Handelsblatt, Fratzscher, who used to work for the ECB himself, lists four reasons and also advises the ECB to establish financial stability as a “much more explicit” goal in its strategy. The ECB only recently reviewed and modified its monetary policy strategy, confirming the 2 percent inflation target.
Commerzbank: Italy’s government bond spreads are likely to widen
Commerzbank analyst Christoph Rieger expects the repayment of a €477 billion TLTRO deal by the European Central Bank (ECB) on June 28 to push yield spreads between 10-year Italian and German government bonds to over 200 basis points. In a comment, Rieger points out that Italian banks have to repay 178 billion euros, which exceeds their excess liquidity by 68 billion euros.
Pistorius represents intense commitment of armed forces in prospect in the Indo-Pacific
At a meeting on international security in Singapore, Federal Defense Minister Boris Pistorius (SPD) held out the prospect of an intensive engagement by the Bundeswehr in the Indo-Pacific. “I think that we in Europe are well advised not to lose sight of this region or (…) to focus more on it at all,” he said on Friday at the so-called Shangri-La Dialogue. “We are present and will be in the future.”
US calls on Russia and China to hold arms control talks
The United States has called on Russia and China to hold nuclear arms control talks. US National Security Advisor Jake Sullivan said at a conference in Washington on Friday that his country wants talks with Moscow about a follow-up to the New Start nuclear weapons control treaty, which expires in 2026. “Rather than waiting for us to resolve all our bilateral differences, the US stands ready to talk to Russia about nuclear risk management now.”
South Africa dodges questions about possible Putin arrest
In the dilemma of a possible visit by the Russian president, who is wanted by arrest warrant Wladimir Putin in South Africa, the government there is evading a clear answer. On the second day of the foreign ministers’ meeting of the so-called Brics countries in Cape Town, the South African foreign minister tried to draw attention to the fight against poverty. “We cannot allow a conflict in one part of the world to eclipse our efforts to end global poverty (…),” Naledi Pandor said on Friday.
+++ economic data +++
Brazil Industrial Production Apr -0.6% MoM – IBGE
Brazil Industrial Production Apr -2.7% yoy – IBGE
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(END) Dow Jones Newswires
June 02, 2023 13:00 ET (17:00 GMT)