PakStox Outlook

Two important developments that took place this week, shaping the economic and political landscape of Pakistan, have come after a long legal process, but will not be noteworthy for their legal standing. One was the disqualification of Imran Khan by the Election Commission of Pakistan, and the other, the exclusion of Pakistan from the ‘gray list’ by the FATF. Although ample legal grounds were available, legality on such matters is just a useful tool. Both of these decisions were rooted in politics, local as well as international. Therefore, the implication of such decisions should be assessed based on their political angle rather than legal. What is important in the disqualification verdict of ECP, is the recommendation for initiating a criminal proceeding for ‘acts of corruption’ by the Ex-Prime Minister, Imran Khan. This is important in the respect that even if the disqualification is reversed in a court appeal, or becomes ineffective through legislation, the criminal proceeding based...

Oil extends gains after Opec+ agrees to slash crude output.   Read news Opec+ agreed to further tighten global crude supply with a deal to slash production by about two million barrel per day, the largest reduction since 2020. Given that production at some of the Opec+ countries are below target levels, the actual cut would be smaller than the two million bpd reduction. More than half of the one million bpd supply cut is expected to come from the world’s top exporter Saudi Arabia,  A draw in US SPR  last week also supported prices. Crude inventories dropped by 1.4m barrels in the week ended Sept 30 to 429.2m barrels (EIA). Brent trading at $93.3 and WTI at $87.6. See OPEC production caps. Twt . Gold has risen close to 7% after touching a low of $1615 last week. see

"Dow soars 800 points as stocks extend massive rally on fresh hopes for less hawkish central banks".  Read "Employment data added to optimism that the tightening cycle may come to a close sooner than previously thought. Job openings in August plunged by 1.1 million in a possible sign that a slowing labor market will ease inflationary pressure." "Stocks soar, yields slide on hints of cooling economy".  Reuters "U.S. stocks and oil on Tuesday posted strong gains for a second straight day while U.S. Treasury yields slid as investors wondered if global efforts by central banks to fight inflation may ease in the future." A soaring US dollar will force the Fed to pivot away from its interest rate hikes :  Business Insider "It appears increasingly likely that the Federal Reserve will pivot away from its currently hawkish monetary policy as global US dollar liquidity is now in the "danger zone where bad stuff happens," Morgan Stanley's...

 Dow Jones Year to Date Components Retunes: Dow Jones Year to Date Performance (slickcharts.com)

Down Jones below 28k.  Closed at 28,726 down 500 points (1.71%). YTD down 20%. Worst month September. Dow Jones YTD Performance | MacroTrends Dow Jones Year to Date Performance (slickcharts.com)

IMF Executive Board Completes the Combined Seventh, and Eighth Reviews of the Extended Fund Facility for Pakistan: • The Executive Board of the International Monetary Fund (IMF) completed the combined seventh and eighth reviews under the Extended Fund Facility (EFF) for Pakistan, allowing the authorities to draw the equivalent of SDR 894 million (about US$1.1 billion). • The authorities have taken important measures to address Pakistan's worsened fiscal and external positions resulting from accommodative policies in FY22 and spillovers from the war in Ukraine, and which have placed significant pressure on the rupee and foreign reserves.  • The immediate priority is to continue the steadfast implementation of the recently approved budget for FY23, adherence to a market-determined exchange rate, and pursuit of a proactive and prudent monetary policy. It is also important to continue to expand social safety to protect the most vulnerable and accelerate structural reforms including to ...

22Sep22 Iran protests over hijab worsen. 21Sep22 Fed hikes rate by 75bps, to 3-3.25%. Signals more aggressive stance. read 21Sep22 Russia calls reservist. 18Sep22 Dow tumbles 1,200 points for worst day since June 2020 after hot inflation report See