Conference, data releases and Hyperloop | Calamatta Cuschieri

In Europe

In an environment characterized by relatively muted inflation, monetary policy is not the right instrument to address financial imbalances, European Central Bank (ECB) President Mario Draghi said on Thursday.

At the second annual conference of the European Systemic Risk Board (ESRB), Mr Draghi mentioned the importance of the interaction between monetary policy and macroprudential policies designed to mitigate systematic risks in the economy. The imbalance between the two happens when monetary policy is used to address financial imbalances but this may lead to substantial deviations of aggregate output and inflation from their desired level. This is a reality in the Eurozone where monetary policy affects the entire region whilst financial imbalances may be of a local nature, for example, in only one country.

The United States

On Thursday, the United Nations assembly heard the United States President Donald Trump stating that he will put more sanctions against North Korea. However, he did not elaborate further on what those sanctions will entail. Earlier in the day, the U.S President said he will make "an important announcement" concerning the regime.

Meanwhile, the US Department of labour reported the US initial jobless claims for the week ending September 16 decreased by 23,000 to 259,000 from the previous week’s revised level of 282,000. Other data shows that house prices in the US rose by 0.2% in July when compared to the month before. On an annual basis, the US House Price Index grew 6.3% in July.

Precious Metals

Precious metals traded in the red with gold hitting the lowest value in over three weeks, since August 28, after United States Federal Reserve monetary decision was announced the day before. The Fed decided to keep the interest rates unchanged and gradual monetary stimulus implementation. Following Fed's Yellen speech the US dollar also strengthened, reducing investor incentives in the yellow metal. 

Hyperloop

The startup developer of a vacuum tube–based, environmentally friendly transportation system made another step in expansion on Thursday, announcing it obtained a total of $245 million in financing since 2014. Hyperloop One, headquartered in Los Angeles, said the latest, series B-1 round brought $85 million from new and existing investors including Caspian VC Partners as a part of Summa Group, OurCrowd.com, GE Ventures, WTI and Khosla Ventures.

The concept of pods carrying people at high speeds to destinations has been devised by entrepreneur and engineer Elon Musk. The target for new venture capital was $50 million, but the goal was topped, said the executive chairman and co-founder. Currently Hyperloop One is the only company in the world that has built an operational Hyperloop system. The company is moving towards commercialization by working with governments and embracing public-private partnerships.

Disclaimer: This article was issued by Rodrick Duca, Trader at Calamatta Cuschieri. For more information visit, www.cc.com.mt. The information, view and opinions provided in this article is being provided solely for educational and informational purposes and should not be construed as investment advice, advice concerning particular investments or investment decisions, or tax or legal advice. Calamatta Cuschieri Investment Services Ltd has not verified and consequently neither warrants the accuracy nor the veracity of any information, views or opinions appearing on this website.