The "central mother" who manages money actually went on strike in order to raise wages!
Due to the unmet demand for a 26% salary increase, 1,300 employees of the Brazilian central bank have been on strike for 20 days, and the Brazilian central bank is almost in a state of shutdown, resulting in the release of many key economic data and monetary policy in Brazil. Analysts in the country lamented that the current market transactions are becoming more and more confused.
The most recent monetary policy introduced by Brazil's central bank was on March 16 this year. On the same day, Brazil's central bank announced a 100 basis point rate hike, raising the benchmark interest rate to 11.75%, which is the ninth consecutive rate hike since March 2021. Brazil's central bank expects rates to be raised by the same rate at the next rate meeting.
The snowstorm in Canada has also exacerbated global concerns about the food crisis. Canadian climatologists predict that another storm this week will bring 12 inches of rain and snow to the southeast of Saskatchewan, Canada's largest agricultural province, or delay the sowing of Canadian crops. At present, grain commodity prices continue to rise, and the price of corn futures in the United States once hit a new high in nearly a decade.
Brazil's central bank strikes
The financial industry's top "strike workers" are on strike and protest against "too low wages," which is happening in Brazil, the largest country in South America.
As of April 20, all employees of the Central Bank of Brazil have been on strike for 20 days due to the Brazilian government's refusal to request a 26% salary increase for employees of the Central Bank of Brazil, resulting in the delay in the release of a number of key economic data and monetary policy in Brazil.
As planned, Brazil's central bank needs to update the Focus Market weekly, while it has been suspended in April. The report discloses key economic data such as Brazil's National Consumer Price Index (IPCA), GDP growth, the Brazilian real's exchange rate against the US dollar, and the current account.
Analysts in the country said the market had to operate in this situation due to the lack of key economic data for 3 consecutive weeks, and all the transactions became increasingly confused.
The strike protest began on April 1, according to CCTV News, on the same day, the employees of the Central Bank of Brazil collectively launched an indefinite strike to demand higher wages, and at the critical moment, the governor of the Brazilian central bank, Campos Neto, was on vacation in Miami, USA.
On April 12, 1,300 staff members and unions of Brazil's central bank held a general meeting, and more than 80 percent of the participants favored the continuation of the strike in response to no progress on salary increases. To this day, Brazil's central bank remains on lockdown, and the country's economic survey reports and economic data have been postponed indefinitely.
The strike, along with Brazil's Ministry of Economy and the Internal Revenue Service, has left the government's economic system almost paralyzed, with a number of customs, budgets and key economic data being released indefinitely.
In fact, the general strike that broke out in Brazil's financial sector has been backlogged for a long time. According to Reuters, Brazil's central bank has not raised salaries in the past 3 years, and some people have not even raised salaries in the past 5 years.
Against the backdrop of soaring inflation, real salaries for central Bank employees have been falling. For now, the Brazilian government has still failed to come up with a salary increase that satisfies the country's central bank's employees.
On April 13, Bloomberg reported that Brazilian President Bolsonaro announced that starting in July this year, the central bank of Brazil will raise the salaries of employees by 5%, which will increase public financial expenditure by 6.3 billion reais (about $1.3 billion) in 2022.
The 5% increase did not satisfy the staff of the Brazilian central bank. Central bank unions say a 5 percent raise isn't enough to stop their strike. Employees of Brazil's Federal Police also said they were not satisfied with the 5 percent pay increase and asked the president to commit to job adjustments to achieve the purpose of salary increases.
In the face of a growing wave of strikes, Brazil is mulling a bigger pay rise. On April 18, local time, Brazil's special secretary of finance and budget, Conago, said that the Brazilian federal government plans to allocate 11.7 billion reais (about 16.166 billion yuan) in the 2023 budget for salary increases for civil servants.
Brazil's central bank, which is frantically raising interest rates
The most recent monetary policy introduced by Brazil's central bank dates back to March 16 this year. On the same day, Brazil's central bank announced a 100 basis point rate hike, raising the benchmark interest rate to 11.75%, which is the ninth consecutive rate hike since March 2021. Brazil's central bank expects rates to be raised by the same rate at the next rate meeting.
In addition, given the uncertainty brought about by the Russian-Ukrainian conflict, Brazil's central bank hinted that further interest rate hikes could be raised if needed.
Supported by the Brazilian central bank's continued interest rate hikes, the Brazilian real has staged a dramatic rebound this year. As of April 19, the real had appreciated nearly 20 percent against the dollar, reaching a nearly two-year high.
Boosted by the sharp appreciation of the real, the dollar-to-Brazilian carry trade, in which investors borrow dollars to buy Brazilian local currency bonds, has yielded 24 percent, the highest rate of global arbitrage trading and more than double the return on second-place arbitrage trading, since the end of December last year.
It is worth mentioning that although the Brazilian central bank continues to raise interest rates sharply, the country's inflation rate continues to "burst the table" and the potential upward risk is high.
Brazil's consumer price index reached 11.3 percent in March, the highest since 1994, according to the latest data from Brazil's National Bureau of Geography and Statistics, which has been at a double-digit level for seven consecutive months and nearly twice the 5 percent ceiling set by the Brazilian government for this year.
In the future, Brazil will still face greater inflationary pressures, the Russian-Ukrainian conflict will continue, and global energy prices may continue to rise. In addition, Ukraine and Russia, as big exporters of fertilizers, have been affected by the war, and Rus' has suspended fertilizer exports, resulting in fertilizer prices continuing to soar.
As a large agricultural country, Brazil's imports of fertilizers have always been very large, and the import of fertilizers from Russia will reach 9 million tons in 2021, resulting in an increase in the cost of agriculture in Brazil, or will lead to an increase in domestic food prices.
The latest economic report released by Brazil's Ministry of Economy pointed out that factors such as the conflict between Russia and Ukraine, the new crown epidemic and the high inflation rate will have a negative impact on Brazil's economic development this year. Brazil's economic growth forecast for this year has been revised down to 1.5 percent from 2.1 percent. At the same time, the inflation forecast for this year was raised to 6.55%.
In addition, this year is the brazilian election year, as the campaign enters a white-hot stage, the future policy direction will also be one of the potential risks to the Brazilian economy.
At present, industry insiders predict that the Brazilian economy may experience stagflation this year, that is, high inflation and stagnant economic activity are superimposed. Brazil's leading think tank, the Vargas Foundation, expects inflation to reach 6.2 percent or 6.3 percent this year, while economic growth will fall to 0.3 percent or 0.4 percent.
Food is hit by another "big storm"
The snowstorm in Canada has also exacerbated global concerns about the food crisis.
Canadian climatologists predict that another storm this week will bring up to 12 inches of rain and snow to the southeastern Saskatchewan and Manitoba provinces of Canada.
More than 80 per cent of Canada's farmland is concentrated in the three western prairie provinces, namely Saskatchewan, Manitoba and Alberta. Among them, Saskatchewan is Canada's largest agricultural province, with 43% of Canada's arable land.
Canada is the world's largest canola grower and major wheat exporter, but has been suffering from climate disturbances lately. Last year, Canada's crop yields have been drastically reduced by drought. And this round of snowstorms will bring new risks of delaying the sowing period.
In addition, the cultivation of rapeseed requires a lot of fertilizer, affected by the situation in Russia and Ukraine, fertilizer prices are continuing to rise, once the cost is too high, Canadian farmers turn to other crops, may exacerbate the price fluctuations of rapeseed oil.
Since April 13, a rare snowstorm has swept through central Canada's Saskatchewan and southern Manitoba, as well as northern Ontario. The Canadian Meteorological Service warns that these areas are experiencing snowfall of 20 to 50 centimeters and monsoons with speeds of up to 70 kilometers per hour or even stronger. Some meteorologists said the blizzard was almost "historic" rare.
At the U.S. border, unusual snowfall and cold are also delaying the planting of crops, including local corn and spring wheat.
Affected by this, the price of grain commodities has risen sharply again. On Monday, US CBOT July corn futures surged 2.8%, breaking through $8 per bushel, a new high in nearly a decade since September 2012 and up 1/3 from $6 at the beginning of the year.
According to the analysis, the continuation of the Russian-Ukrainian conflict, the close to the waist of Corn production in Ukraine, the lower than expected intention of corn sowing in the United States, and the delay in Planting in Canada due to snowstorms and severe cold weather have made the corn rally far from over.
The Food and Agriculture Organization of the United Nations warned that global food supply problems were likely to persist and that rising food prices showed little sign of slowing down. Food stocks are reduced, crop prices are likely to be higher, and food markets are likely to be more volatile in the future.
Editor-in-charge: Luo Xiaoxia
Illegal and bad information reporting telephone: 0755-83514034
Email: [email protected]