China’s prolonged lockdowns hit commodity prices
EU explores options for Russian oil sanctions ($FT)
China top planner on the epidemic’s impact (trans.)
Russia/India hold talks on coking coal payments
U.S. gas-fired combined cycle electricity generators
SPR releases – authority, impact and replenishment
Whirlpool financials hit by inflation and slower sales *
* Rapidly rising prices and falling real incomes are encouraging households to postpone purchases of expensive durable goods. Reductions in durables spending often signal a slowdown in the business cycle. According to economist Robert Shiller:
“A recession, for example, is a time when many people have decided to spend less, to make do for now with that old furniture instead of buying new, or to postpone starting a new business, to postpone hiring new help in an existing business, or to express support for fiscally conservative government.” (“Narrative economics”, American Economic Association presidential address, January 2017).
U.S. HOUSEHOLDS overwhelmingly believe now is a “bad time to buy” major durable goods owing to high prices. In the University of Michigan’s latest monthly survey of consumers conducted in March, 57% of respondents said it was a bad time to purchase a major household durable item, down slightly from a record 59% in February, but otherwise the highest level since 1980. Durables are the most cyclically sensitive part of consumer spending. Spikes in the “bad time to buy” measure usually correspond to end-of-cycle recessions or at least mid-cycle slowdowns. In the survey, 42% of respondents said it was a bad time because of high prices, 7% cited uncertainty about the future, 4% said they couldn’t afford it, and only 1% cited interest rates:
FRANKFURT’s heating demand, a proxy for the major population centres of Northwest Europe, has been almost -11% below the long-term seasonal average this winter, with the heating season almost over, which has eased some of the pressure on gas inventories and helped avoid an even sharper spike in prices:
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