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A series of strong economic data has persuaded investors swing behind US central banker hints that the Federal Reserve will only cut interest rates gradually in the coming months. Next week’s inflation figures mark the next point to shape investor thinking. 

Thursday sees consumer price inflation figures with producer price numbers due on Friday. Before both, the minutes of the Federal Reserve’s September meeting, due on Wednesday, should reveal more about the debate that led the bank’s rate-setting committee to cut rates by half a percentage point in its first divided decision in almost two decades. 

A blowout payrolls report last week showed the US adding 240,000 jobs in September, far more than forecast, and pushing futures contracts to imply about a 90 per cent probability that the Federal Reserve will only cut interest rates by a quarter-point when it meets in early November. 

Thursday’s consumer price index is expected to support that with only muted price pressures seen last month. The core index — stripping out volatile food and energy — is expected to have risen 0.2 per cent month-on-month, according to economists polled by Reuters, while the headline reading is predicted to rise 0.1 per cent on the same basis. Year on year, that would put the two at 3.2 per cent and 2.3 per cent respectively, estimate analysts at Barclays.

“Inflation outcomes along the lines of our forecasts should reinforce the [Fed’s] confidence that the disinflation process is intact and would likely keep the focus on upcoming labour market data and other indicators of activity,” US economist Pooja Sriram wrote in a note to clients. Jennifer Hughes

Is the yen carry trade back?

An unexpected rate hike in August led to a dramatic unwinding of the so-called yen carry trade, through which investors and speculators borrow yen to fund trades in higher yielding currencies and assets.

Comments from Japan’s incoming prime minister, Shigeru Ishiba, suggesting the economy is not ready for further rate rises, has been taken by some investors as a sign that it is safe to re-enter the trade.

The yen fell almost 3 per cent last week to ¥146 to the US dollar, triggering a small rally in Japanese equities, particularly export-heavy companies that benefit from a weaker currency.

“Investors took those comments as a green light to rebuild the carry trade”, said Wei Li, head of multi-asset investments based in China at BNP Paribas.

“We are in a risk-on environment”, he said, adding that demand to borrow yen to fund riskier trades was coming back as confidence in the US economy remains strong.

Tomochika Kitaoka, Nomura’s chief equity strategist in Japan, warned that the data behind whether investors were piling back into the carry trade was “imperfect”, adding there was evidence that some hedge funds had returned to net short positions in the yen.

“Before the Japanese snap election [on October 27], it’s a relatively safe window to review the carry trade”, added Li. Arjun Neil Alim

Is the UK economy growing again?

The UK economy is expected to return to growth in August after two months of stagnation, according to official data published on Friday.

The robust expansion of the UK economy at the beginning of the year has strengthened the argument for a gradual approach to reducing interest rates until clearer indications of a decrease in the high inflation in the services sector. In August, services in inflation rose to 5.6 per cent from 5.2 per cent in the previous month.

However, economic growth in the second quarter was revised down to 0.5 per cent, marking a slowdown from the 0.7 per cent in the previous quarter. Incoming data suggest growth could slow to 0.3 per cent in the third quarter, but the figures for August will bring greater clarity. Economists polled by Reuters expect that GDP expanded by 0.2 per cent month-on-month in August.

Last week, the governor of the Bank of England said bank’s rate-setters could be “a bit more aggressive” in lowering borrowing costs. However, the BoE’s chief economists warned against rapid rate cuts saying: “It will be important to guard against the risk of cutting rates either too far or too fast” and cautioned for a “gradual withdrawal”.

Ellie Henderson, an economist at Investec, is more optimistic than the consensus, expecting a rebound in retail sales and the absence of junior doctor strikes to fuel a 0.3 per cent expansion.

She said that while activity in the autumn might be temporarily depressed due to households and businesses holding off on large purchases and investments ahead of the Budget on October 30, the monetary policy easing cycle and strong growth in real household disposable income will “continue to support economic momentum”. Valentina Romei

DOCTORS have urged passengers to pick up a simple £2.99 item to avoid pain during flights.

Many flyers can experience sinus pain when on a flight – caused by changes in pressure.

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This is caused aerosinusitis and, unlike “aeroplane ear“, which can be solved by popping your ears, it doesn’t have an easy fix.

However, doctors say that simple congestion relief medicine can do the trick – which can be picked up for as little as £2.99.

Dr Richard Lebowitz, an ear, nose, and throat (ENT) doctor at NYU Langone Medical Center, told the Thrillist website: “The sinuses are air-filled spaces – that is, empty spaces – in the bones of your face, and they have little openings in them, so they can equalize pressure.

“They’re normally just always open, but they can get blocked from swelling or inflammation of the sinus lining.”

Dr Richard explained that this could cause intense pain for flyers.

He said:  “The sinus needs to equalize pressure, too. But there’s no way for it to do it, so it just keeps getting worse and worse over the course of that descent. It can be really excruciating at times.”

Moving on to the simple treatment, Dr Richard said: “You can try to reduce the swelling of the membranes that can block the opening, so that would mean using the same things you’d use if you have this problem with your ears – Rin and Sudafed.”

He added that in extreme cases, doctors may prescribe oral steroids for inflammation – and in even more extreme cases, a surgical procedure can be undertaken.

He said: “It’s very easy to fix the problem if you’re someone who has this regularly and flies a lot or professionally.

“You have to open up those sinus drainage halfway surgically. Once you do that, the problem goes away.”

Aerosinusitis can be extremely uncomfortable for some passengers.

Erica Klauber, 39, recalled experiencing severe pain and even fearing she was having an aneurysm while on a business trip in 2013.

She said:  “I remember looking at the guy next to me.

“I was like, ‘Should I reach out and tell him? Do I have the faculties to tell him that this is it?’”

However Dr Richard reassured travellers that as painful as may feel, aerosinusitis is “not really a big deal”, adding: “Once the pain has resolved, the problem is resolved.”

He added that while many patients fear their heads might explode, “that isn’t a real thing. Your sinus cannot explode or implode. It just hurts a lot.”

A significant part of my professional working life has been spent at HonestReporting. I’ve worked through far too many crises, including several major IDF military operations, mass-casualty terror attacks, and numerous incidents that made the front pages of every international newspaper around the globe.

In this sphere, you have to come to grips with the constant fight ahead. You may win critical battles, but the war itself—a war beyond the military battlefield—is one you may never fully win. This is a fight for Israel’s legitimacy and its right to be treated as just another state among the nations.

The past year has been one of the hardest I’ve ever experienced, not just because of the relentless attacks in the international media on Israel’s right to defend itself against Hamas terrorists who carried out the worst atrocity against the Jewish people since the Holocaust. It’s also the overwhelming antisemitism and abuse that floods social media—things I force myself to see and respond to every day.

It’s the inability to separate my work from the harsh reality Israelis are living through—because I’m one of them. In a country this small, it’s almost a cliché to say everyone is connected to someone directly affected by the situation. But it’s the truth.

I live in Modi’in, a city of 100,000 situated exactly halfway between Jerusalem and Tel Aviv. It’s a place proud of its distinction as having the highest percentage of 18-year-olds answering the mandatory call to serve in the IDF.

In my late 40s, I’m at an age where the soldiers on the frontlines are both my peers and the children of many friends and acquaintances. In my position, I receive constant updates from various governmental and non-governmental organizations, including the IDF, police, and Magen David Adom emergency responders. Far too often, I’d wake up to an IDF notification about the latest casualties. Sometimes, a name would stand out and I’d pray it wasn’t the child of a friend or colleague. Tragically, sometimes it was.

The husband of a former colleague and the son of a family friend, both killed in Gaza. A cousin from my extended family, stabbed to death while serving as a Border Policewoman in Jerusalem’s Old City. The pain and grief are beyond words.

HonestReporting is a microcosm of the country as a whole. One colleague has been on army reserve duty for over 200 days, leaving his wife and two small children to manage without him, while our organization is left without a key team member. Another colleague’s husband has spent many days in uniform, leaving her to care for their baby alone. Everyone is affected in some way, and we are no different from countless workplaces disrupted by the mandatory call to serve.

I will always consider it a privilege to have a level of insider access that many Israelis don’t. At the end of November, I was invited to a breakfast at a foreign ambassador’s residence, alongside colleagues from other organizations and some family members of the hostages.

We sat and listened as the families shared the stories of their loved ones, still held captive in Gaza. At one point, an attendee broke down in tears. She quickly apologized, wondering aloud how she could be the one crying when others in the room had brothers, sisters, husbands, wives, and children being held by Hamas—yet somehow, they managed to keep their composure while fighting for their release.

In the immediate aftermath of Hamas’ rampage, I believed Israel might have three or four days before the global narrative turned against us. In truth, I’m not sure we even had that.

Today, we continue fighting against media bias and anti-Israel slander—not just because it’s our job or career, but because it’s our responsibility as proud Israelis. We’ve been given the privilege to serve our country and people in the best way we know how.

Liked this article? Follow HonestReporting on Twitter, Facebook, Instagram and TikTok to see even more posts and videos debunking news bias and smears, as well as other content explaining what’s really going on in Israel and the region.

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The EU is stuck in a paradox. Virtually everyone agrees that most of Mario Draghi’s recommendations for raising productivity growth are good ones. Yet hardly anyone expects that member states will muster the agreement to pool the sovereignty and resources needed to realise them.

The reasons are many. Some of Draghi’s most consequential ideas have long been bedevilled by the political differences of 27 countries, national commercial rivalries or by leaders’ unwillingness to prioritise what often come down to highly technical measures — especially against vocal domestic constituencies.

One or more of these reasons have so far held back the banking and capital markets union (CMU). They have also delayed bigger joint investments in carbon transition and defence, completing the single market, and making international economic policy more strategic without losing the benefits of Europe’s openness.

On top of it all, Europe’s traditional Franco-German integration motor looks as obsolescent as an internal combustion engine in China. Paris is paralysed by elections that produced a parliament without a majority; Berlin by a government that has long since fallen out of favour with voters and even, it seems, with itself. Even where they ostensibly agree — a year ago they published a joint road map to CMU — they are not propelling the EU forward.

If anything is going to get done, it will not be by traditional methods. What if, instead, one could identify a group of nations that trusted each other enough and had sufficiently similar policy preferences to form a “coalition of the willing” for the deeper integration Draghi and others call for? Provisions in the EU treaties for “enhanced co-operation” allow as few as nine countries to do so with the full support of EU institutions when broader agreement is elusive.

So look north. The three Baltic and three Nordic EU members already collaborate as the “Nordic-Baltic Six”. The Nordics have had passport-free travel and free movement of people for 70 years. The region’s countries see eye-to-eye in areas from financial regulation and fiscal matters to defence, security, trade and climate.

Add in Ireland and the Netherlands to regroup what some years ago was known as “the New Hanseatic League”, and you have the EU’s most developed capital markets. Together, these eight approach France in population. They match it in economic size. And they have strength in numbers.

It is not hard to imagine a cohesive bloc centred on the “NB6” recruiting enough other countries — maybe different ones for different policy areas — to maintain the nine-country quorum for enhanced co-operation.

Such a coalition could start with two crucial ingredients for a more dynamic European economy: CMU (more common rules, supervision and financial trading) and a “28th regime” of corporate law as an opt-in alternative to national incorporation for companies wanting to do business and raise funds at scale.

The economic prize is evident. An already innovative region with better-working capital markets than the rest of Europe would boost the ability of EU entrepreneurs to raise capital and scale up activity without having to move across the Atlantic. The region’s financial sectors would benefit.

There are political advantages, too. These countries could build something they want without being held up by the need to compromise with the wider bloc. To be more ambitious about it, the mere prospect of such a coalition might ungum deadlock as other states fear being left behind. Alternatively, others would come in later, but on terms the early adopters had already defined. There are big first-mover advantages to being pioneers.

The irony is that, more often than not, these nations have been like-minded in putting a brake on integration, not furthering it. So this approach would require a profound change of outlook for Europe’s northern flank. Rather than small-country bit players suspicious of the continental powers, the region would need to see itself as a leader of Europe in a newly dangerous world. Also, the European Commission would have to welcome enhanced co-operation as a lever for progress, not a threat.

But the leadership for this exists. The likes of Finland’s president, the deeply pro-European Alexander Stubb could take the initiative for leaders in the region. They should dare to inspire their citizens to be agents of change rather than a wary resistance to the EU’s traditional powers. If successful, such inspiration would not be contained in the EU’s northern flank. Rise to the challenge together, and they could transform the politics of an entire continent.

martin.sandbu@ft.com

Mohammad Reza Pahlavi ruled Iran as the Shah from 1941 to 1979. While his regime had Western support, it was not democratic. The Pahlavi regime’s authoritarian behavior led to the alienation of many Iranians and resulted in the 1979 Revolution of 1979 and its takeover by Ayatollah Ruhollah Khomeini, a Shia religious leader living in exile in Paris at the time. After the revolution, many of the Shah’s wealthy supporters emigrated to California and formed an influential community on the West Coast of the United States.

For years, followers of Reza Pahlavi, the Shah’s son and the former Iranian crown prince, have advocated for a transition from an Islamofascist dictatorship to a monarchy for Iran, almost similar to what happened in Spain. They compare Pahlavi to Juan Carlos, who ascended the throne and abolished the dictatorship with the support of Franco’s military.

Pahlavi followers claim he can achieve the same with the support of the Islamic Revolutionary Guards Corps (IRGC). Pahlavi himself has stated many times that he is in touch with the Iranian regime and has been open to IRGC overtures.

Spain’s transition from the dictatorship of Francisco Franco to a constitutional monarchy under King Juan Carlos I was a pivotal moment in Spanish history. Franco ruled Spain as a right-wing military dictator following his overthrow of the left-wing republic in the Spanish Civil War (1936–1939). Ultranationalism, authoritarianism and repression and persecution of political opposition characterized his regime. Before his death in 1975, Franco designated the exiled Prince Juan Carlos de Borbón as his successor, hoping that he would perpetuate the ultranationalist regime.

Contrasting Iran and Spain’s political landscapes

Juan Carlos dismantled the authoritarian regime and moved Spain towards democracy instead of following in Franco’s footsteps. The first step was the Political Reform Act of 1976, which allowed for the dismantling of Francoist institutions and paved the way for democratic elections. In 1977, the legalization of political parties led to the first free elections since the 1930s. Subsequently, a new democratic constitution was drafted and approved by a popular referendum in 1978, establishing Spain as a democratic parliamentary monarchy and guaranteeing fundamental rights and freedoms for all citizens.

However, Iran today is far from Spain, and there are fundamental differences between the two countries. The most significant is that the IRGC is not a regular military like Spain’s army was towards the end of Franco’s rule. The Guards are more akin to the SS in Nazi Germany and the Red Army in the Soviet Union, created with the specific purpose of enforcing the ideological agenda of their totalitarian regime. This makes them dependent on the regime’s core belief system, values and interests to stay relevant.

Even today, the Islamist regime’s warmongering across the Middle East and crimes against humanity in Iran and around the world deeply involve the IRGC, a US- and Canadian-designated “state terrorist organization” that is also likely to be designated by the EU. It is bent on the defeat of the United States, the destruction of Israel and the conquest of the Arab world. As such, the IRGC cannot possibly provide the building block for a democracy or even a normal regime in Iran.

The general behavior of Pahlavi’s Iranian supporters has not proved promising for democracy, either. His associates and followers have started a regime of oppression in exile even before getting to power in Iran. They have assaulted non-Pahlavist protesters during anti-regime demonstrations abroad, ran campaigns of harassment and intimidation against journalists and democracy activists, pushed IRGC talking points about political prisoners and Iran’s ethnic minorities and welcomed all kinds of nefarious regime affiliates, including antisemitic IRGC members, among their ranks.

The reality of Iran’s political transition

To cap it all, Pahlavi himself recently rejected democracy and instead suggested that he roots for some kind of an authoritarian regime. By erroneously comparing Iran to Afghanistan and putting forward a fallacious essentialist argument, Pahlavi claimed that Iran’s society, like Afghanistan, has its own “traditions, norms and means of governance” and imposing an “inauthentic Western construct” like “democracy” on it will lead to anarchy similar to Afghanistan. While the West and most of the free world widely praised the recent nationwide “Woman, Life, Freedom Revolution” in Iran for its progressive values, Pahlavi boldly made that argument to the contrary.

Pahlavi’s willingness to blatantly distort the truth about Iran and what most Iranians want explains why he and his supporters were disturbed by the Woman, Life, Freedom Revolution in the first place. Not only did they not fully support it, but they also took issue with many aspects of it because the progressive nature of that revolution nullified the Pahlavist narrative regarding the “backwardness” of Iranian society to legitimize an authoritarian regime, most likely in the form of an absolutist monarchy with Reza Pahlavi as its Shah.

Unlike Spain, Iran would not transition from fascism to democracy even if they put the prince on the throne and allowed the IRGC to continue to exist. The Guards are unlikely to relinquish power and become a regular army subordinated to a constitutional system. Instead, they would exploit their newfound legitimacy as Pahlavi’s praetorians to continue their campaign of terror in Iran and abroad.

Pahlavi himself would serve as a figurehead to legitimize the existence of the new fascist order. His advocacy for what inherently goes against American values, his dynasty’s historical hostility to democracy and his followers’ reactionary rhetoric and anti-democratic bent will further empower the Guards and their Russian allies to prevent Iran from shifting towards the West once the current Islamofascist regime falls.

As we have seen in the past decade, Moscow has learned that promoting far-right positions and politicians worldwide helps keep the world divided. At the same time, it continues to push for conquest and global domination. Iran is already within the Russian sphere of influence. Still, if the Islamist regime were to fall, the Kremlin would prefer to have an ultranationalist junta run the country rather than a Western-friendly liberal democracy. In other words, the Russians don’t want to see Iran as a powerful pillar of Western security strategy like the post-WWII Germany and Japan.

As things stand, Iran risks passing from one totalitarian regime to another. If things unfold in that direction, the country will remain a hotbed of tyranny and radicalism, oppressing its people while continuing to threaten its neighbors and the wider world. The democratic world needs to intervene to help the Iranian people establish a liberal democracy and bring Iran back to the West.

[Liam Roman edited this piece.]

The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy.

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French energy giant TotalEnergies is studying whether to start trading copper, potentially paving the way to expand its vast oil trading operations into metals for the first time to capitalise on the energy transition.

Rahim Azouni, senior vice-president of crude, fuel and derivatives trading, said the company has been “studying the case” for trading copper, in remarks made at a closed-door conference in London, according to several people who attended.

Azouni cited the energy transition as the reason to consider expanding into copper trading, but added that it had not yet decided to do so, people who heard his remarks on Wednesday told the Financial Times.

TotalEnergies already has a vast trading arm that handles oil products, gas, power and new fuels, though it does not disclose the size of its trading activities. 

His remarks come as a growing number of oil traders are expanding into metals to capitalise on the world’s need for copper, which is used in electricity cables, buildings and electric vehicles. The race for cleaner energy is also boosting demand for aluminium and nickel.

While global copper demand is expected to surge over the next decade, the oil market has been lacklustre this year with China’s reduced demand for the fossil fuel keeping prices low despite war in the Middle East.

Traders and trading firms that have built their fortunes around trading oil, recording bumper profits during the energy price volatility since Russia’s invasion of Ukraine in 2022, are increasingly moving into metals to capitalise on demand. 

Vitol, the world’s largest independent oil trader, has recently returned to metals trading, a business that it exited in 2014.

This year it poached two aluminium traders from a rival firm, and is focused on aluminium as part of its energy transition strategy.

Geneva-based commodity firm Mercuria is also expanding into metals, building a 60-person metals trading unit under Kostas Bintas, formerly the co-head of metals at rival Trafigura.

Even hedge fund manager Pierre Andurand, one of the world’s top-performing energy traders, has shifted to focusing on copper and other metals. Earlier this year he predicted that copper would reach $40,000 a tonne over the coming years, quadruple its current price. 

Tom Price, resources analyst at Panmure Liberum, said that low volatility in the oil market, and long-term changes in energy systems, were driving the shift to metals.

“They can see oil demand and the oil market in trend decline, and they are trying to de-risk that world, by switching to [the] metals world,” said Price, adding that the transition might be difficult for companies built around oil trading.

“These markets aren’t structured the same way as oil,” he said. “In principle they can do it, but in practice it will be a struggle.”

TotalEnergies Chief Executive Patrick Pouyanné has previously said that the energy transition is likely to increase energy prices in the long term, although the group is now also bracing for a period of lower prices in liquefied natural gas as more supply comes online, especially from 2027 onwards.

That has added to Total’s incentive to buttress its earnings, with the company telling investors on Wednesday that it was confident it could “de-risk” its LNG activities and operate profitably.

TotalEnergies declined to comment on the copper trading plans.

Additional reporting by Sarah White