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The threat of a $4 trillion hole in the global outlook haunts the IMF: Environmental Week

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(Bloomberg) – Global finance chiefs will meet in Washington in the coming days, warning that the prospect of losing $4 trillion in global economic output is ringing in their ears.

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This is the Germany-sized hole in the growth outlook to 2026 that IMF chief Kristalina Georgieva identified last week as an imminent risk.

She will play host as central bank governors, finance ministers and others as they grapple with the repercussions of rampant inflation on the global economy, monetary tightening, rising debt, and Europe’s biggest ground war since World War II.

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The annual meetings of the International Monetary Fund and the World Bank will be entirely in person for the first time since the outbreak of the Covid-19 virus in early 2020, showing progress in stamping out the epidemic, it will be uncomfortable given the other headaches.

The current confluence of economic, climate, and security crises makes it different from anything global policymakers have seen since 1945. However, some elements, such as the havoc in emerging markets wrought by the Federal Reserve’s interest rate hike in the early 1980s, chime with the present predicament.

“The big question for the meetings is, ‘What are we going to do in terms of the institutional response to this, beyond business as usual,’” Masoud Ahmed, president of the Center for Global Development in Washington, said last week.

Here’s a quick look at some of the issues officials will be dealing with:

  • World Economic Prospects: The International Monetary Fund releases this on Tuesday. Georgieva said last week that the global growth forecast for 2023 of 2.9% will be lowered.

  • Ukraine: The country that Vladimir Putin’s forces invaded in February will remain in focus, from the impact of a depleted grain harvest to the pressure of Russian gas on Europe. The International Monetary Fund’s board on Friday approved a $1.3 billion loan to Ukraine, the nation’s first since early March.

  • Food prices: The International Monetary Fund’s board last month approved a new emergency financing “food shock window” to help countries affected by rising agricultural costs.

  • UK: The country remains at risk after market turmoil forced a partial turn in the tax cut package from Prime Minister Liz Truss’s new government that has been criticized by the International Monetary Fund.

  • Federal Reserve: US tightening is hurting other economies. IMF calculations show that 60% of low-income countries and a quarter of emerging markets are in or near debt distress.

  • Climate: The crisis is getting worse, as evidenced recently by disasters from floods in Pakistan to hurricanes that hit Puerto Rico and Florida.

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Elsewhere this week, a faster reading of core inflation in the US, financial stability news in the UK, an interest rate hike in South Korea and the Nobel Prize in economics will be among the highlights.

What Bloomberg Economics says:

“When foreign finance ministers and central bank governors gather in Washington for the World Bank and International Monetary Fund meetings next week, many may argue that the rest of the world cannot afford any additional Fed increases.”

Anna Wong, Andrew Hosby and Elisa Winger. For the full analysis, click here

Click here to find out what happened last week and below is our summary of what will happen elsewhere in the global economy.

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US economy

In the US, the CPI is the highlight for the coming week. Thursday’s Labor Department report will give Fed officials a snapshot of how inflationary pressures are developing after a series of massive interest rate increases.

Economists estimate that the consumer price index rose 8.1% in September from a year ago, slowing from the 8.3% annual increase the previous month as energy prices stabilized. However, excluding fuel and food, the so-called core CPI is still accelerating – it is expected to show an annual gain of 6.5%, versus 6.3% in August.

An increase in that volume in the primary metric would match the biggest advance since 1982, illustrating stubborn inflation and keeping the pump ready for a straight 75 basis point rate hike at the November Federal Reserve meeting.

Investors will hear from a number of US central bankers next week, including Vice President Lyle Brainard and the Federal Reserve’s regional chairs Loretta Mester, Charles Evans and James Bullard. The minutes of the Federal Reserve’s September meeting will be released on Wednesday.

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Other data includes figures on prices paid to US producers. So-called wholesale inflation showed signs of abating as commodity prices weakened amid concerns about a global economic slowdown.

The week will be capped with retail sales data. Economists expect modest monthly progress in September, helped by an increase in car purchases. Excluding autos, the value of retail sales is expected to decline for a second month. Since the numbers were not adjusted for inflation, the data indicates a slowdown in demand for goods in the third quarter.

Asia

Bank of Korea Governor Ri Chang-yong may take a short detour on the rate hike scale. While it returned to its usual quarter-point increase in August, many economists see it picking a move of twice that size on Wednesday as the fast Fed squeezed the won.

The Monetary Authority of Singapore is seen on the verge of tightening for the fifth consecutive meeting, while the State Bank of Pakistan is expected to keep the interest rate steady for a third.

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Assistant Governor Lucy Ellis may shed light on the Reserve Bank of Australia’s latest policy thoughts after its pivot to small rallies.

Bank of Japan Governor Haruhiko Kuroda and Finance Minister Shunichi Suzuki will be in Washington for IMF meetings, as the yen’s moves remain under close scrutiny.

Europe, Middle East and Africa

The week begins with the announcement of the Nobel Prize in Economics on Monday. The award was created by Sweden’s Riksbank in 1968, adding a sixth category to the existing prizes for physics, chemistry, medicine, peace and literature. Three academics based in the United States won in 2021 for their work using real-world experiments to revolutionize experimental research.

The Bank of England’s Monetary Policy Committee will take center stage on Wednesday, an emphatic sign that the UK is facing major problems.

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The committee, which is responsible for emergency intervention to prevent a vortex in the bond market last month, will release a record for its last meeting. That may offer insight into whether officials see the risk of the renewed turmoil that has already plagued pension funds in the wake of Britain’s mini-budget. It may also address the effects of a sharp increase in mortgage rates.

Bank of England Governor Andrew Bailey is among several officials scheduled to speak next week, many of whom will be present at or near IMF meetings.

Likewise, several other officials from across Europe will speak in or near Washington. European Central Bank President Christine Lagarde and her Swiss National Bank counterpart Thomas Jordan are scheduled to deliver their comments.

In terms of European data, the UK will provide the most important news. The jobs and growth reports may paint a richer picture of how the UK economy is doing amid rising inflation and rising inflation.

Industrial production in the Eurozone on Wednesday is likely to partially rebound in August after a much larger decline in the previous month.

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Inflation data will feature prominently in the rest of the region. In Hungary on Tuesday, the pace of price growth could reach close to 20%, while Sweden’s main gauge is expected to exceed 9% on Thursday. Israel and Egypt will also release inflation reports.

To the south, Ghana’s measure of price growth is expected to more than triple the central bank’s 10% target ceiling for the third consecutive month.

Latin america

The week begins with the closely watched weekly focus survey of the Central Bank of Brazil for market expectations. Analysts lowered their inflation forecast for 2022 for 14 consecutive weeks to 5.74%, while the GDP forecast for 2022 during that period was raised to 2.7%.

This increasingly optimistic view of consumer prices in Brazil is likely to be confirmed by data published on Tuesday: Analysts expect price gains to moderate for the third consecutive month in September, leaving the annual pace just above 7% – a full five percentage points lower. Peaked 12.13% in April.

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With inflation in Chile near a three-decade high, the central bank is sure to extend a record tightening cycle, likely to push its key interest rate up 50 basis points to an all-time high of 11.25%. The next bank meets in December.

On Thursday, Mexico’s Bancico published the minutes of its September 29 meeting, in which policy makers raised the key interest rate to 9.25%. Many analysts see another 125 to 175 basis points of tightening before officials decide their work is done.

At the end of the week, Argentina is expected on Friday to report an inflation rate in September on an annual basis not far from the 83.45% recorded by Turkey, the highest rate in the G20. 100.3%.

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US Futures Rise, Yields Flat as Dollar Falls: Markets Wrap

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(Bloomberg) — US stock futures rose on Friday ahead of a report on US producer prices that will be one of the final batches of data to inform an interest rate decision by the Federal Reserve next week.

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Contracts on the S&P 500 rose 0.4% after the benchmark made its first advance this month. The European stock index turned gains, trimming its weekly loss to 1.2%. Asian stocks headed for their sixth weekly gain, the longest such period in two years.

Treasury yields were little changed, with the 10-year rate just under 3.5%. The erased dollar scale slipped.

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Investors are encouraged by any signs of price weakness which could allow policymakers around the world to be less hawkish and more supportive of growth.

At the same time, Fed officials worry about fueling stock gains that ease financial conditions too much and frustrate the task of fighting inflation. Strategists have lined up to warn investors against returning to risk in the hope that the Fed will move closer to an easier policy shift.

“Central banks will remain on the safe side when it comes to future inflation after they underestimated inflationary pressures last year,” Carsten Junius, chief economist at Bank J. Safra Sarasin, wrote in a note to clients, adding that a pause in price increases is far from over. little bit.

On Friday in November, the US producer price index will provide a progress report on the effectiveness of the Fed’s campaign to suppress inflation, with consumer price data due next week. Producer price index cooled in October more than expected. And there are some signs that the labor market has softened, with jobless claims still rising to their highest levels since early February.

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“Traders will be keeping a close eye on today’s PPI data, with the S&P 500 options markets pricing the biggest potential move around any PPI release this year,” said Hugo Bernaldo, chief multi-asset trader at Optiver. Investors will also look for clues in today’s data on how Tuesday’s more important CPI numbers will turn out.

Elsewhere in the markets, oil rose on Friday while heading for a weekly decline of about 10% after a choppy session on Thursday on concerns about the economic outlook. Gold advanced for the fourth day.

Main events this week:

Some of the major movements in the markets:

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  • S&P 500 futures were up 0.4% as of 7:26 a.m. New York time.

  • Nasdaq 100 futures rose 0.5%.

  • Futures on the Dow Jones Industrial Average rose 0.2%.

  • Stoxx Europe 600 rose 0.4%

  • The MSCI World Index rose 0.3%.

currencies

  • The Bloomberg Spot Dollar Index fell 0.1%.

  • The euro was little changed at $1.0559

  • The British pound rose 0.3 percent to $1.2274

  • The Japanese yen rose 0.6% to 135.86 per dollar

Digital currencies

  • Bitcoin rose 0.4% to $17,245.72

  • Ether rose 0.9% to $1,289.2

bonds

  • The yield on the 10-year Treasury note was little changed at 3.48%.

  • The German 10-year bund yield advanced six basis points to 1.88%.

  • The yield on the 10-year British Bund advanced three basis points to 3.12%.

goods

  • West Texas Intermediate crude rose 0.9 percent to $72.09 a barrel

  • Gold futures rose 0.6% to $1,812.10 an ounce

This story was produced with help from Bloomberg Automation.

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— with assistance from Rob Verdonk.

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Starwood Property Trust announces dividend of $0.48

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Starwood Property Trust announces dividend of $0.48

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Nick Bollettieri, tennis coach, 1931-2022

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After young Andre Agassi wins an important match while wearing jeans, make-up and earrings, his coach Nick Bollettieri summons him to appear in front of 200 classmates at his tennis academy. As punishment for “defiling” the Center of Excellence, Agassi was sentenced to flush all of the toilets on site. In the next tournament, his coach threatened him that he would have to play in a skirt.

Few people can claim to have produced more champions than “The Michelangelo of Tennis”. Agassi, Jim Courier, Monica Seles, Maria Sharapova and the Williams sisters all trained under pioneering coach Bollettieri, who has died at the age of 91.

In the late 1970s, Politieri pioneered the creation of the Living Academy for young athletes aspiring to achieve greatness. But his methods were as notorious as they were innovative. He would stand bare-chested on the field, berating his young subjects for every stray shot or mis-slashed fist, as they would repeat the same actions thousands of times.

The vision was to bring the best young players together in one place where they could “play, break rackets, gamble, fight, bat”. Students were forbidden to watch television, listen to the radio, eat junk food, or call home during the week. The misdemeanor penalty in court includes forced running without water. But at the end of each practice session, the kids would step in front of their teacher uttering the catchphrase, “Thank you, Nick.”

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In his academic diaries, Agassi described it as “a glorified concentration camp. Not all that glorified.” However, those aiming for the summit continued to pour in there. And despite Pollettieri’s reputation as abrasive and obsessive—he got up every morning at 4:30 a.m. to stretch and lift weights—many of those he taught speak of him affectionately as a surrogate parent. They also became winners. Of the tens of thousands of players who had trained under him, ten would reach the world number one rank.

“I was living my dream,” Sharapova, who joined the academy at the age of eight, said. he told the Financial Times in 2015. “I saw all these great champions come and train. I would wake up every morning and I couldn’t wait for my alarm to go off at 6.30am and go get my lesson.”

Bollettieri and Andre Agassi in 1988 after winning on the field in New York © Caryn Levy / Sports Illustrated / Getty Images

Nicholas James Bollettieri was born in 1931 in Pelham, New York. His parents were Italian immigrants. He was the quarterback on the football team in high school, before his uncle convinced him to try out the “sneaky sport of tennis”.

After studying philosophy in college in Alabama, Politieri joined the army, became a paratrooper and reached the rank of lieutenant. His time in the army would be central to his coaching ethos later in life. He said, “I started to learn a lot being a parachutist—the discipline, the feeling that you’re the best in the world, that you can do anything.”

After leaving the military in 1957, he enrolled to study law at the University of Miami. To help make ends meet, he began offering tennis lessons at $1.50 an hour, despite having no experience as a coach and no more than that as a player. Less than a year later, he gave up his studies to devote himself to tennis.

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“A lot of coaches know tennis a lot more than I do,” he said. “What I do know is how to work with you as a person.”

In 1961, he discovered Brian Gottfried, who was then nine years old, on the field and took him under his wing. Gottfried would later become Bollettieri’s first hit, reaching No. 3 in the world in 1977.

That same year, after a stint teaching wealthy hotel clients to play tennis, he landed at Colony Beach & Tennis Resort near Sarasota, Florida. A year later, he founded the Nick Bollettieri Tennis Academy.

He went on to borrow $1 million to transform his 40-acre tomato plants in Bradenton, Florida, into a sprawling tennis training camp that opened in 1981. Agassi referred to his time there as “a forehand master of the flies,” but he attended for free. His father only had money to pay for three months’ tuition, but Bollettieri called him to say he was “tearing up the check” after seeing how good he was. The pair suffered an emotional split in 1993, shortly after Agassi won the first of his eight Grand Slam titles.

Bollettieri was known for his money management problems. With financial problems looming, he sold the Academy to IMG in 1987. But he continued to run it.

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Today the site covers approximately 600 acres, and teaches a wide range of sports to the 1,200 full-time residents and thousands more children and adults who attend sports camps there. In 2014, Politieri was inducted into the Tennis Hall of Fame, one of only four coaches to receive the award.

Josh Noble

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