MH Daily Bulletin: December 15

December 15, 2022 • Posted in Daily Bulletin

News relevant to the plastics industry:

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Supply

  • Oil rose 2% Wednesday after several key industry groups said demand would rebound next year, helped in part by slowing U.S. interest-rate hikes.
  • In mid-morning trading today, WTI futures were down 1.1% at $46.43/bbl and Brent was down 0.8% at $82.03/bbl.
  • U.S. natural gas prices rose for a fifth day on forecasts of cold weather across the nation this month. Futures were up 2.7% today at $6.60/MMBtu. 
  • U.S. crude stocks rose by more than 10 million barrels last week, the most in almost two years, according to the Energy Information Administration.
United States Crude Oil Stocks Change

Supply Chain

Domestic Markets

United States Fed Funds Rate
  • At their Wednesday meeting, Federal Reserve officials said the U.S. would need at least 75 basis points of additional rate hikes by the end of 2023, leading to a higher-than-expected terminal rate of around 5.1%. Rates could start going down in 2024.
  • The Federal Reserve predicts the U.S. economy will grow at a 0.5% pace in 2023, a sharp downgrade from the central bank’s September prediction of 1.2%. The unemployment rate, meanwhile, is forecast to rise to 4.6% from its current level of 3.7%.
  • U.S. retail sales fell 0.6% in November from the prior month.
  • Initial jobless claims fell by 20,000 last week to 211,000, well lower than expectations, indicating continued resilience in labor markets. 
  • U.S. import prices fell for a fifth straight month in November, pulled down by declining costs for petroleum products and a strong dollar.
United States Import Prices

International Markets

  • On-the-ground reports suggest Beijing’s economic and residential activity has abruptly halted amid surging COVID-19 cases.
  • Pfizer will soon be permitted to sell its COVID-19 antiviral pill Paxlovid in China, a response to the nation’s surging infections.
  • China plans a wide range of steps, including a near-overhaul of policies in various sectors, to spur domestic consumption and investment over the next decade and beyond.
  • Following the U.S.’s lead yesterday, the European Central Bank, the Bank of England and Swiss National Bank each raised interest rates by 50 basis points today and signaled further rate hikes ahead. 
  • Europe’s executive branch proposed new rules Wednesday that would let nations give more incentives for energy and other tech investment, a response to U.S. subsidies seen as a threat to European industry.
  • Germany plans to issue a record $533 billion of debt next year to fund costs associated with Europe’s energy crisis and continued fallout from COVID-19. 
  • Led by fuel shipments, Japanese imports surged by an annual 30.3% in November, resulting in the 16th straight month of trade deficits.
  • British inflation fell to 10.7% in November after hitting a 41-year high of 11.1% the previous month.
United Kingdom Inflation Rate
  • Economic activity in Brazil, Latin America’s biggest economy, contracted in October, according to new data.
  • Peru declared a state of emergency Wednesday, suspending basic rights in a bid to restore order amid widespread, violent unrest.
  • Canadian financiers are raising concerns that the government’s new proposal to scrutinize foreign acquisitions more closely in the name of national security will deter foreign investment and slow deals in critical sectors.
  • Europe’s central bank is converting to a flexible schedule in which employees can work half the days of the year remotely.
  • German engineering giant Bosch expects to beat forecasts with over $92 billion in revenue this year. The firm also says it will continue reducing its exposure to China in favor of India.
  • Visa plans to invest $1 billion in its business across Africa over the next five years as it pushes for wider adoption of digital payments.
  • Microsoft aims to secure internet access for 100 million more people in Africa by 2025 by building out the continent’s telecom and electricity infrastructure.
  • Aircraft leasing firms are suing dozens of insurers for around $8 billion to compensate for the hundreds of aircraft stuck in Russia since its invasion of Ukraine.
  • Inditex, owner of the world’s biggest fashion retailer Zara, saw profit rise 24% the first nine months of the year as price hikes helped offset weakening global demand.

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