Currency

Ebang International Holdings Inc. Reports Unaudited Financial Results for The First Six Months of Fiscal Year 2020

Friday, September 25, 2020 - 9:15pm

Net loss in the first six months of 2020 was US$6.96 million compared to US$19.07 million in the same period of 2019.

Key Points: 
  • Net loss in the first six months of 2020 was US$6.96 million compared to US$19.07 million in the same period of 2019.
  • Selling expenses in the first six months of 2020 were US$0.45 million compared to US$0.49 in the same period of 2019.
  • Net loss attributable to Ebang International Holdings Inc. in the first six months of 2020 was US$6.21 million compared to US$18.11 million in the same period of 2019.
  • About Ebang International Holdings Inc.
    Ebang International Holdings Inc. is a leading application-specific integrated circuit ASIC chip design company and a leading manufacturer of high-performance Bitcoin mining machines.

The ECB’s enhanced effective exchange rate measures

Friday, September 25, 2020 - 12:04am

The effective exchange rate (EER) of a currency is an index of the weighted average of its bilateral exchange rates vis--vis the currencies of selected trading partners; a real EER is derived by adjusting this nominal index for relative prices or costs.

Key Points: 
  • The effective exchange rate (EER) of a currency is an index of the weighted average of its bilateral exchange rates vis--vis the currencies of selected trading partners; a real EER is derived by adjusting this nominal index for relative prices or costs.
  • [1] The weighting scheme used to aggregate the bilateral rates accounts for the relative importance of each country as a trading partner.
  • The ECB has recently enhanced the calculation of its euro EER indices to take account of the evolution of international trade linkages and, in particular, the growing importance of international trade in services.
  • [4] In addition, improved data coverage made it easier to include services trade on the basis of the established ECB methodology.
  • Chart A The evolution of overall trade weights in the euro EER-42 over time (percentages)
  • There are significant differences in the relative importance of manufacturing and services trade for the euro areas most important trading partners (see Chart B).
  • Trade in services is also much higher than manufacturing trade for the United Kingdom and the group other advanced European economies, whereas it is much lower for central and eastern European EU Member States, whose trade linkages with the euro area are to a large extent shaped by their integration in European manufacturing value chains.
  • Chart B Trade weights in the euro EER-42: manufacturing, services and combined (percentages)
  • Import and export weights are broadly similar for most countries and regions, even after correcting for competition in third markets (see Chart C).
  • Overall trade weights are calculated as (weighted) averages of export and import weights measuring the share of each country in the euro areas exports or imports respectively.
  • To take account of this effect, double export weights are used to calculate the overall trade weights.
  • While for most countries and regions the single and double export weights do not deviate much from one another, for China the difference is pronounced.
  • Chart C Trade weights in the euro EER-42: overall weights, import weights, simple export weights and double export weights (percentages)
  • With the enhanced weighting scheme, it emerges that the appreciation of the euro since the beginning of 2017 has been slightly less pronounced in nominal terms than it appeared to be based on the previous weighting scheme, primarily owing to the increased weight of advanced economies.
  • [6] Between the beginning of 2017 and the end of August 2020, the updated daily nominal EER of the euro vis--vis the EER-42 group of trading partners appreciated by 12.3%, compared with 13.8% according to the indicator based on the old manufacturing weighting scheme (see Chart D).
  • In real terms, however, developments were very consistent, with both the enhanced real EER-42 (deflated by the consumer price index) and the previously published series appreciating by just below 7% between January 2017 and August 2020 (see Chart E).
  • Chart D The evolution of the nominal euro EER based on previous and updated weights (percentage changes, 31 August 2020 relative to 2 January 2017)


Chart E The evolution of the real euro EER deflated by the consumer price index based on previous and updated weights (index; rebased to January 2017 = 100)

The role of indirect taxes in euro area inflation and its outlook

Friday, September 25, 2020 - 12:04am

Changes in indirect tax rates can have a visible impact on consumer prices.

Key Points: 
  • Changes in indirect tax rates can have a visible impact on consumer prices.
  • This assumes the full and immediate pass-through of changes in indirect taxes to consumer prices and therefore, on balance, tends to overstate the effects of tax changes.
  • [1] Based on this measure, the contribution from changes in indirect taxes to euro area HICP inflation has been, on average, 0.2 percentage points, but was much stronger during periods when tax rates increased, such as in 2007 and between 2011 and 2014 (see Chart A).
  • Chart A HICP and HICP at constant tax rates (annual percentage changes; percentage point contributions)
  • However, in response to the coronavirus (COVID-19) pandemic, several euro area countries have reduced indirect tax rates on a scale not seen before in the euro area.
  • In addition to temporary reductions in broad-based value added taxes (VAT) in Germany and Ireland, many other euro area countries have recently introduced targeted reductions in indirect taxes (see Chart B).
  • [2] Assuming full and immediate pass-through, Eurostats HICP at constant tax rates implies that the reduction in VAT in Germany would have a downward impact on euro area HICP inflation in July 2020 of around 0.6 percentage points.
  • [3] Chart B Impact of changes in indirect taxes on HICP inflation (percentage point contributions based on difference between HICP and HICP at constant tax rates)
  • The actual impact of the recent reductions in indirect taxes on inflation is surrounded by considerable uncertainty.
  • First, historically there are few examples of cuts in indirect tax rates in euro area countries that could shed light on the likely degree of pass-through.
  • Lastly, the lions share of the current reduction in indirect taxes results from the VAT rate cut in Germany, which is only temporary (and very rare in euro area countries), and might thus generate unusual anticipation effects.
  • [6],[7] The pass-through of recent reductions in indirect taxes is likely to vary across sectors and to be overall incomplete.
  • The reductions in indirect tax rates in euro area countries shape the inflation profile for 2020 and 2021 in the September 2020 ECB staff projections.
  • Understanding the impact of indirect taxes on the inflation profile and outlook is relevant for the communication of monetary policy.
  • Chart C Impact of changes in indirect taxes on HICPX inflation projections (annual percentage changes; percentage point contributions)

The fiscal implications of the EU’s recovery package

Thursday, September 24, 2020 - 12:06am

Prepared by Alessandro Giovannini, Sebastian Hauptmeier, Nadine Leiner-Killinger and Vilm Valenta The EUs recovery package represents an important milestone in European economic policy integration.

Key Points: 
  • Prepared by Alessandro Giovannini, Sebastian Hauptmeier, Nadine Leiner-Killinger and Vilm Valenta The EUs recovery package represents an important milestone in European economic policy integration.
  • For NGEU, the European Commission has been authorised to raise up to 750billion on the capital markets on behalf of the European Union.
  • The funds can be used to provide loans of up to 360 billion and grants of up to 390 billion.
  • These will be disbursed up to the end of 2026 and repaid by 31 December 2058 at the latest.
  • The NGEU issuance will increase outstanding Union debt by a multiple of around 15, constituting the largest ever euro-denominated issuance at supranational level.
  • The Recovery and Resilience Facility (RRF) constitutes the core of NGEU.
  • They should also strengthen the growth potential, job creation and economic and social resilience of the Member State concerned.
  • In 2021-22 funds will be distributed on the basis of income per capita and past unemployment developments; for 2023 the past unemployment developments will be replaced by the observed declines in real GDP in 2020-21.
  • The agreed distribution of funds will imply sizeable net financial support for those euro area countries that face the biggest economic and fiscal challenges after the pandemic (see ChartB)[3].
  • Chart B RFF: allocation of grants, net of expected repayments (percentages of 2019 GDP)

The viral effects of foreign trade and supply networks in the euro area

Thursday, September 24, 2020 - 12:05am

In the euro area, the deep integration of firms within regional supply chains as well as strong demand ties acts as a magnifying mechanism.

Key Points: 
  • In the euro area, the deep integration of firms within regional supply chains as well as strong demand ties acts as a magnifying mechanism.
  • This article quantifies the propagation and impact of adverse shocks originating in the euro area on euro area GDP, foreign trade and trade balances.
  • The negative spillover effects are most severe for open countries and those most intertwined in regional production networks.

1 Introduction

    • This article employs multi-regional input-output tables to evaluate the transmission via foreign trade of adverse shocks generated by lockdowns and containment measures across the euro area.
    • The latter are only indirectly affected as a result of effects on the inputs of the sector directly affected by suppression measures.
    • Our methodology accommodates the analysis of a variety of shocks, in particular, single country, multi-country, sector specific and foreign trade specific shocks.
    • The abovementioned properties are particularly relevant given the strong interdependence of euro area economies and this articles focus on shocks originating in the euro area.
    • In this context, analyses based on methodologies that fail to consider euro area interconnectedness are likely to underestimate the effective impact of the COVID-19 shock.
    • Section 5 concludes by reviewing the main takeaways from our analysis and discusses the potential structural economic changes triggered by COVID-19.

2 Data and methodology

    • The article takes data from the Multi-Regional Input-Output (MRIO) databaseof the Asian Development Bank (ADB) that reconstructs national and international flows between country-sector pairs and sectoral final demand.
    • The database encompasses all euro area economies and a broad set of other countries.
    • Compared with alternative sources, it also provides more recent information up to 2018 (see Box 1 for a detailed description of the database and our methodology).
    • [2] The analysis uses a static representation of the economic linkages across sectors and countries to evaluate the economic effects on individual industries of virus-suppression policies.
    • The entire manufacturing industry, except for food, beverages, tobacco and pharmaceuticals, has been significantly affected by COVID-19 containment measures.
    • Let zis denote the elements of the respective matrices, where s, t {1,,N} denote the exporting and the importing sector respectively.
    • We apply sectoral supply shocks to rows and demand shocks to columns.
    • Shocks are calibrated based on internal and external analyses of the repercussions of countries containment measures.
    • Depending on the scenario, a shock (s)can be single-country or multi-country and model production disruptions or final demand shocks.
    • [4] In a second stage, indirect shocks are applied to model the supply chain adjustment to the shock in the first stage.
  • The analyses rest on some key assumptions and have certain limitations, such as:
    • they strip out the price effects of implemented policies;
    • they provide no information on the implications of and interaction with significant monetary policy measures, although the effects of implemented fiscal and monetary policies indirectly influence the exercises to the extent that they modify the forecasts of aggregate output developments in 2020;
    • moreover, since they are static, the assessments ignore potential permanent changes in the structure of economies that may ensue from reshoring or the diversification of essential production processes and changes in lifestyle, time allocation across activities, consumption preferences and daily needs.
    • In our framework, as long as the relative magnitude of sectoral innovations is preserved, the final effects of a given shock are proportional to the original shock.
    • In this way, our assessments can be adapted to analyse the effects of milder or more severe trajectories that the pandemic might take.
    • Thus, the industry experiencing the sharpest contraction in production takes the value of 100 and shocks in other sectors are indexed to it.
    • We calibrate the shocks based on sectoral information available on the effects of suppression measures and on analyses from internal experts as well as external sources.
    • Possible trade diversion effects are ignored as their appearance may be delayed and our analysis focuses on 2020.

3 Transmission channels

    • [8] In this section, we discuss the various channels that are at play when this occurs and how shocks originate in country-sectors and spill over to the rest of the world, amplified by foreign trade.
    • Domestic production shocks applied to the ICIOT are transmitted to upstream and downstream trading partners and further up and down the chain to partners of trading partners via export and import channels.
    • Intuitively, by halting domestic production, lockdown measures are conducive to shortages of intermediate goods produced domestically that enter foreign production processes via trading partners (known as the export channel).
    • These shortages generate negative supply shocks for companies located downstream in the chain.
    • At the same time, they reduce the demand for foreign intermediates entering domestic production processes (known as the import channel).
    • We, however, only model the first two steps, the reduction in imports and foreign production and the foreign intermediates demand shock.
    • To illustrate the transmission mechanism, let us consider shop closures and, more specifically, look at the case of a bar forced to lock down.

4 Euro area-wide repercussions of containment measures in the five largest economies

    • [9] Using the transmission channels explained above, we assess spillovers from the lockdowns, temporary closures, restrictions on movement and other containment measures adopted by the five largest euro area economies (Germany, France, Italy, Spain and the Netherlands) since early March 2020.
    • The sectoral distribution of production shocks reflects the expected differential impact of containment measures across industries.
    • The initial aggregate GDP shocks to the five largest euro area economies in 2020 correspond to the projections for euro area economies in the June 2020 BMPE.
    • Table 1 Shock calibration: indices of sectoral output shocks due to containment measures by main sector of activity
    • There is very substantial transmission of domestic shocks in the five largest euro area economies to aggregate activity in the rest of the area.
    • Based on the current structure of euro area countries and their interdependencies, our assumptions and the sectoral calibration above, the impact of a shock similar to the COVID-19 suppression measures applied to the five largest euro area economies would be amplified by 15-28%.
    • Lost output results in a reduction in income if the original shock is not countered through policy measures.
    • The main finding of this exercise is that the degree of interconnectedness influences the amplification of the initial shocks.
    • Chart 1 Transmission of single-country shocks to the five largest euro area economies through supply and demand linkages (left-hand scale: percentage; right-hand scale: multiples)
    • Euro area foreign trade contracts by more than aggregate activity and lockdown measures lead to GVC retrenchments.
    • COVID-19-induced shocks have caused a deterioration in the net trade positions of euro area Member States.
    • Net trade has contracted in all of the five largest euro area economies, substantially contributing to the transmission of the initial domestic shock to GDP.
    • Table 2 Most affected countries and sectors in the euro area
    • Box 2 The euro area regional production network The euro area is a unique example of a regional production network.
    • GVC linkages in the region reflect an intricate supply web with more than one hub, comprising production, shipping and financial centres.
    • This box describes the euro area production network and discusses how it has changed, focusing in particular on the period after the GFC.
    • This distinction is key when disentangling trade within a production network from GVC trade with other production networks.
    • Chart A GVC exports by main euro area trading partner/region (as a percentage of total bilateral exports)
    • The European production network remains the engine behind aggregate activity in the euro area.
    • In 2018, three-quarters of the intermediates exported by euro area countries within the European Union were destined for further processing and re-exporting; two-thirds reached another euro area member.
    • Supply chains in the euro area continued to develop amid a decline in GVCs share of total global exports since before the GFC.
    • While the global trade slowdown did not spare euro area trade, the euro area actually strengthened its position as a leader in GVCs relative to other regions after the GFC.
    • Chart B Change in euro area GVC exports, shallow and deep linkages (2018-2008) (as a percentage of total bilateral exports)
    • Integration within the euro area is clustered around a few economies (Germany and the Netherlands in particular).
    • Based on the bilateral flows in intermediates crossing at least two borders, the five largest euro area economies are primarily integrated with the Netherlands, which acts as the euro area delivery and arrival point for exports and imports from the rest of the world.
    • Eastern enlargement of the euro area and improvements in stressed countries explain the success of its regional supply chains after the GFC.
    • [15] A significant contribution also comes from countries like Spain, Portugal and Greece that improved their participation in regional GVCs relative to their pre-GFC values.

5 Conclusion

Record Cryptoart Sale: Matt Kane's "Right Place & Right Time," a programmable artwork that changes with Bitcoin price volatility, sells for over $100K on Async Art

Monday, September 21, 2020 - 10:33am

Made of 24 Layers synchronized with Bitcoin's price volatility from the previous 24 hours, it was created exclusively on Async Art.

Key Points: 
  • Made of 24 Layers synchronized with Bitcoin's price volatility from the previous 24 hours, it was created exclusively on Async Art.
  • Through volatility.art , Matt Kane will periodically produce and sell a digital art NFT to represent a day in the life of Bitcoin.
  • One day at a time, "Right Place & Right Time" could become one of the most significant pieces in the cryptoart movement.
  • Art that can evolve over time or react to its owners is now possible with programmable art.

Bit Digital, Inc. Announced Officially to Cooperate with the World's Leading Bitcoin Colocation Partner In U.S.

Friday, September 18, 2020 - 3:00am

Compute North is the world's leading bitcoin colocation company headquartered in Nebraska U.S. Pursuant to the service agreement, Compute North will provide bitcoin mining facilities for the Company's colocation, managing mining equipment which will save the Company's operating cost, including utilities and rent.

Key Points: 
  • Compute North is the world's leading bitcoin colocation company headquartered in Nebraska U.S. Pursuant to the service agreement, Compute North will provide bitcoin mining facilities for the Company's colocation, managing mining equipment which will save the Company's operating cost, including utilities and rent.
  • The pilot test with Compute North LLC represented the Company's strategy to source the best bitcoin and bitcoin mining resources in North America and further help the Company to balance its operations worldwide.
  • This press release may contain certain "forward-looking statements" relating to the business of Bit Digital, Inc. and its subsidiary companies.
  • Other than as required under the securities laws, the Company does not assume a duty to update these forward-looking statements.

KBRA Europe Assigns Preliminary Ratings to BlackRock European CLO X Designated Activity Company

Thursday, September 17, 2020 - 10:42pm

Kroll Bond Rating Agency Europe Limited (KBRA) assigns preliminary ratings to five classes of notes to be issued by BlackRock European CLO X Designated Activity Company (BlackRock Euro CLO X DAC), a cash flow collateralised loan obligation (CLO) back primarily by a diversified portfolio of Euro-denominated corporate loans and bonds.

Key Points: 
  • Kroll Bond Rating Agency Europe Limited (KBRA) assigns preliminary ratings to five classes of notes to be issued by BlackRock European CLO X Designated Activity Company (BlackRock Euro CLO X DAC), a cash flow collateralised loan obligation (CLO) back primarily by a diversified portfolio of Euro-denominated corporate loans and bonds.
  • BlackRock Euro CLO X DAC is managed by BlackRock Investment Management (UK) Limited (BlackRock UK or the collateral manager).
  • The collateral in BlackRock Euro CLO X DAC will mainly consist of broadly syndicated leveraged loans and bonds issued by corporate obligors diversified across sectors.
  • BlackRock UK currently has 3.8 billion in AUM across 9 European CLOs as of June 2020 and has been a consistent European CLO issuer since 2015.

BIGG Digital Assets Inc. Announces Completion of Non-Brokered Private Placement of CAD $525,000 and Planned Launch of Bitcoin SV on Netcoins

Thursday, September 17, 2020 - 1:00pm

Indigo is an investment arm of Calvin Ayre, a key investor and advocate of Bitcoin SV (Satoshi Vision).

Key Points: 
  • Indigo is an investment arm of Calvin Ayre, a key investor and advocate of Bitcoin SV (Satoshi Vision).
  • Bitcoin SV is the Bitcoin blockchain that follows creator Satoshi Nakamotos original protocol and design for massive scaling.
  • With the inclusion of Bitcoin SV, Netcoins will have eight digital assets available to its user base.
  • We are also excited to add Bitcoin SV to the Netcoins app, making Netcoins an even more attractive trading platform for Canadians.

CoinGeek Live Presents: Cashless Casinos - How Bitcoin Technology Offers A Better & Safer Gaming Experience

Wednesday, September 16, 2020 - 7:00pm

The conference will, naturally, be virtual but it is far more than just 'Zoom-heads' on a black background.

Key Points: 
  • The conference will, naturally, be virtual but it is far more than just 'Zoom-heads' on a black background.
  • CoinGeek Live is also delighted to welcome The Malta Gaming Authority's Chief Legal and Enforcement Officer, Carl Brincat, to keep proceedings in order.
  • To enjoy and interact at CoinGeek Live you must be registered to enjoy the live experience and should you wish to explore other topics being discussed during the 3-day conference the full agenda is now available.
  • Coingeek Live is sponsored by The Bayesian Group, Bitcoin Association, the Cozen O'Connor law firm, EHR Data, NB Domain, nChain, TAAL, Omniscape and more.