Energy prices pushed US consumer prices up 0.3 per cent in August, as in July. (Without seasonal adjustment, the increase was 0.1 per cent.)
Holding energy and food prices constant, however, prices would have been static on the month. This is unusual: for the past three months, the index for all items less food and energy increased. Year-on-year, this index has remained at 0.9 per cent for five straight months, making the headline rise in inflation potentially misleading. Read more
Both short- and medium- term rouble volatility will fall if the central bank gets its way. The Bank of Russia tweaked its currency interventions strategy yesterday, saying it would consider oil prices when working out how many roubles to sell.
A warning was also issued to forex speculators as the Bank said its currency interventions were “directed mainly at neutralising the firm expectations of forex market participants”. Oil price rises can heighten speculation of a rouble rise, as the Russian economy is heavily dependent on the stuff.
The rouble has greatly appreciated in recent months, and the Bank is still cutting interest rates and buying dollars and euros to counter the rise.
The Bank of Russia explained its intervention strategy thus:
The operations of the Bank of Russia on purchases/sales of foreign currency undertaken in excess of the set target volumes are directed at smoothing out the movements in the rouble’s exchange rate which are not determined by the influence of fundamental economic factors.
It’s not about central banks, but it has the potential to affect the risk profile of every country in Europe.
Kazakhstan is considering a new pipeline route to bring its growing oil surplus to Europe, via Georgia and Armenia, a route that was damaged during the 2008 Russian-Georgian conflict. This would reduce Kazakh dependence on Russian pipelines. A surge of oil production is expected from 2012 when the Kashagan oilfield comes onstream in the Caspian sea – doubling Kazakh output to 3m barrels per day. Read more
The US, Britain, France and Germany are trying to convince Russia and China to agree to blacklist Iran’s central bank and firms linked to the Revolutionary Guard Corps, in a new round of UN sanctions over Tehran’s nuclear program. Russia and China are permanent members of the UN Security council, which means they can – and do – veto resolutions.
Such sanctions could hurt Iran’s energy market. The government has allowed for up to €5bn euro bond issues by the oil ministry to help finance development of the country’s oil, gas and petrochemical sectors. Read more
A report published by MIT suggests the world faces a uranium shortage from 2013. So, a few excel spreadsheets later, we have a rough-and-ready Vulnerability Index for you. Most vulnerable, by our reckoning, are France, Japan and South Korea. Most secure are Australia, Kazakhstan and Uzbekistan. More here. Read more
Banks face higher refinancing costs as $7,000bn of short-term debt is due to mature in the next three years. The IEA is accused of overstating energy reserves and the chief economist of the World Bank says China should not be forced to allow appreciation of the renminbi Read more
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Chris Giles has been the economics editor of the Financial Times since 2004. Based in London, he writes about international economic trends and the British economy. Before reporting economics for the Financial Times, he wrote editorials for the paper, reported for the BBC, worked as a regulator of the broadcasting industry and undertook research for the Institute for Fiscal Studies. RSS
Michael Steen, Frankfurt bureau chief, covers the ECB and the eurozone's economies. He joined the Financial Times in 2007 as Amsterdam correspondent and later worked as a front page news editor in London. Before joining the FT, he spent nine years as a correspondent at Reuters, mostly in foreign postings that included a previous stint in Frankfurt, as well as Moscow, Kiev and central Asia. He read German and Russian at Cambridge.RSS
Robin Harding is the FT's US economics editor, based in Washington. Prior to this, he was based in Tokyo, covering the Bank of Japan and Japan's technology sector, and in London as an economics leader writer. Robin studied economics at Cambridge and has a masters in economics from Hitotsubashi University, where he was a Monbusho scholar. Before joining the FT, Robin worked in asset management and banking. RSS
Ralph Atkins, capital markets editor, has been writing for the Financial Times for more than 20 years following an economics degree from Cambridge. From 2004 to 2012, Ralph was Frankfurt bureau chief, watching the European Central Bank and eurozone economies. He has also worked in Bonn, Berlin, Jerusalem and Brussels. RSS
Claire Jones is Money Supply economics team writer, based in London. Before joining the Financial Times, she was the editor of the Central Banking journal and CentralBanking.com. Claire studied philosophy and economics at the London School of Economics. RSS
