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The World
The Federal Reserve’s balance-sheet unwind is set to ramp up this week, which means the central bank will finally begin unloading the Treasury bills it started amassing almost three years ago. As part of its broader plan to reduce its $9 trillion portfolio, the Fed will boost its monthly caps for the amount of Treasuries and holdings of mortgage-backed securities that it will let mature to $60 billion and $35 billion, respectively, while using its $326 billion stash of T-bills as filler when coupons run below the monthly level. September will be the first month that bills will be redeemed since coupons will fall below the monetary authority’s new cap. (Bloomberg)
US business optimism in China tumbles to an all-time low, with zero-Covid and geopolitical tension top concerns. Coronavirus control measures, US-China relations and Beijing’s data and cybersecurity rules are top concerns. Impacts on consumer demand said to ‘undermine’ confidence in overall business environment in China. (South China Morning Post)
Iran is pressing ahead with its rollout of an upgrade to its advanced uranium enrichment programme, a report by the U.N. nuclear watchdog seen by Reuters on Monday showed, even as the West awaits Iran's response on salvaging its 2015 nuclear deal. (Reuters)
EU split on visa ban for Russians: EU defense ministers are searching for a unified approach as to whether the bloc should ban Russian tourists. A visa agreement could be suspended. (Deutsche Welle)
Major sea-level rise from the melting of the Greenland ice cap is now inevitable, scientists have found, even if the fossil fuel burning that is driving the climate crisis were to end overnight. The research shows the global heating to date will cause an absolute minimum sea-level rise of 27cm (10.6in) from Greenland alone as 110tn tonnes of ice melt. With continued carbon emissions, the melting of other ice caps and thermal expansion of the ocean, a multi-metre sea-level rise appears likely. (The Guardian)
Recent fires have killed more than 13% of all giant sequoias in California, and scientists and officials are growing increasingly concerned that the state is nearing a tipping point in which its forests emit more climate-warming carbon dioxide than they absorb. (Los Angeles Times)
Economy
The EU is preparing emergency measures to curb the price of electricity by separating it from the soaring cost of gas, as Shell warns the energy crisis could last for years, and utilities turn to the state for support. With member states stepping up pressure for action, European Commission president Ursula von der Leyen said Brussels was working on “emergency intervention” as well as structural reforms to the power market — which could allow cheaper renewable energy to help set electricity prices. (Financial Times)
Liz Truss will approve a series of oil and gas drilling licences in the North Sea in one of her first acts as prime minister as part of a long-term plan to ensure Britain’s energy security. Senior allies of the Tory leadership frontrunner have been putting together her response to the energy crisis, with average annual household bills due to rise to £3,549 from October. (The Times)
Energy could be rationed ‘for years’. (The Times)
Few other European powers are as dependent on Russian gas as Germany, but survey data suggests the spike in prices is making Germans more open to both cooperation with other countries for energy and open to more controversial fuels such as nuclear and coal, even if those aren’t viable options for Germany. To achieve energy security, experts say Germany must work with the rest of Europe to connect power grids and pipeline networks to move energy and fuel where it is needed and redouble efforts to expand renewable energy production. (Morning Consult)
Russia Confounds the West by Recapturing Its Oil Riches: Moscow is raking in more revenue than ever with the help of new buyers, new traders and the world’s seemingly insatiable demand for crude. “Nobody’s brave enough to embargo 7.5 million barrels a day of Russian oil and oil products.” (Wall Street Journal)
Shares in China’s privately run banks have fallen sharply this year, as the country’s property slowdown starts to bite. The Shanghai-listed shares of China Merchants Bank and Ping An Bank—two of China’s biggest, most prominent privately run lenders—have fallen by 32% and 25%, respectively, since the start of 2022, wiping $68 billion off their combined stock market value. The selloff is just the latest indication of the problems a slowdown in the property sector is having on the wider economy. (Wall Street Journal)
Technology
Chinese chip maker Semiconductor Manufacturing International Corporation, known as SMIC, said it would invest $7.5 billion in a project to build a new factory in the northern Chinese city of Tianjin. The latest investment plan by mainland China’s largest contract chip manufacturer comes at a time when the U.S. and China are both ramping up their efforts to beef up their domestic semiconductor industries. (The Information)
YouTube’s Top Business Executive Leaving Company: The leadership change comes as YouTube contends with a slowdown in revenue growth and rising competition from short-video services such as TikTok. (Wall Street Journal)
Apple says the number of Apple Podcast subscribers grew by 300%+ since June 2021 and 25%+ of the top 100 shows in its Top Shows chart now offer a subscription. (Digiday)
Will the cloud kill the data centre? Jim Chanos thinks so Veteran short seller is betting against server warehouses but some of the world’s biggest investors remain bullish. (Financial Times)
A new concept for low-cost batteries: Made from inexpensive, abundant materials, an aluminum-sulfur battery could provide low-cost backup storage for renewable energy sources. The new battery architecture uses aluminum and sulfur as its two electrode materials with a molten salt electrolyte in between. (MIT News, Nature)
Prices of battery-grade lithium carbonate in China are currently nine times higher than they were in the beginning of 2021, according to Rystad Energy. The International Energy Agency estimates that lithium demand from EVs and battery storage will need to grow 40-fold by 2040 to meet Paris Climate Accord goals. (Wall Street Journal)
Smart Links
Fixed mortgage rates will fall to 4.5% in 2023, Fannie Mae estimates. (CNBC)
More California cities enact rent control. (Los Angeles Times)
‘No Tour in Golf Like the PGA:’ NBC Sports Head Not Worried About LIV. (Bloomberg)
Deal for Office Space Near Big U.S. Cities Bets on Suburban Lifestyle, Remote Work. (Wall Street Journal)
Tether Says Audit Is Still Months Away as Crypto Market Falters. (Wall Street Journal)
Inside Liz Truss’s not so special relationship with the US. (Financial Times)