For the vast majority of Israelis, coffee drinking culture has become an inseparable part of their lives. In fact, it is so strong that coffee giant Starbucks has failed to break into the local market where Israeli Café Aroma and a myriad of small coffee shops have been dominating for years. However, the Israeli coffee affair may encounter its main test so far – the rise in the price of a beloved drink.

As coffee is one of the goods imported from abroad, its price depends on the world’s supply and demand trends. And recently, the world’s supply was getting smaller. This is to do with the fact that Brazil, the largest coffee producer in the world, has been struggling to cope with the rising demand as its inventories have been falling and are at the lowest level in 23 years due to the weather conditions. According to the National Coffee Council, the nation’s coffee stockpiles may drop to just seven million bags (with each bag weighing 60kg) in the next half a year, whereas under normal circumstances it would stand between nine and twelve million.

But it is not only Brazil whose coffee inventory has been falling. The South American country reflects the global shortage in this commodity. With inflation still being a problem across the globe, combining these factors together may potentially result in a price increase.

In the meantime, the projections for the next year do not look promising as weather conditions add further challenges to the largest coffee producers. As Brazil is battling a severe dry spell, the neighbouring Columbia is experiencing excessive rains. Unfavourable weather is also a cause for concern in Nicaragua, Honduras, and Guatemala. In Vietnam, the second largest producer of coffee in the world, where Robusta coffee makes up 97% of its entire output, the country’s stockpiles have also been declining.

In light of the shrinking supply and the uncertainty regarding coffee inventory surrounding Brazil, Arabica coffee futures in New York rose 11% compared to the last year, and the market consensus is pointing to further rises in the near term.

Firms worldwide, including Starbucks and JDE Peet’s (one of the biggest coffee roasting companies in Europe), have already passed on this price hike and other rising costs to consumers to deal with inflationary pressures.

As to the situation in Israel, where inflation is half what it is in the US and Europe, the growing concerns of falling coffee stockpiles have yet to be reflected in the local market. Should coffee lovers in Israel start planning household budget cuts for their beloved beverage? I believe we will see it in the near future. But buying extra coffee supplies and stocking up would not sound too crazy at this stage.

<p>The post Will demand for coffee fall as the price rises? first appeared on Isranomics.</p>

The agreement highlights how, for certain Arab countries, national concerns like security and the economy have taken precedence over resolving the protracted Israeli-Palestinian problem.

Rafael’s cutting-edge Python-5 and I-Derby missiles are incorporated into the transportable system to offer short, medium, and long-range defence against a variety of threats, including cruise missiles, attack aircraft, unmanned aerial vehicles and more.

The device can engage several threats simultaneously within an 80 km range regardless of weather due to its wireless data link communication.

Since the signing of the Abraham Accords, Israeli defence officials have met with their regional counterparts over 100 times and inked agreements worth more than $3 billion in an effort to sign defence agreements and strengthen military ties.

Last week, UAE Foreign Minister Sheikh Abdullah bin Zayed visited Israel and met with President Isaac Herzog, Prime Minister Yair Lapid and Defence Minister Benny Gantz.

Back in April, at least eight Boeing C-17 Globemaster heavy transport aircraft belonging to the UAE Air Force landed in Israel.

This type of airplane is designed to carry large payloads of 164,900 pounds, land on runways that are less 3,000 feet long, and travel 2,400 nautical miles.

All the airplanes landed at the Israel Air Force’s Nevatim and took off about an hour after landing. Although the reason for the large transport aircraft’s presence in Israel has never been revealed, it is assumed that they were most likely bringing equipment associated with bilateral defence agreements.

As the UAE is continuing to take part in the military campaign together with Saudi Arabia against the Iranian militia in the region, it has been subject to a drone missile attack back in January. With the Abraham Accords agreement normalising relations between the two countries, Israel agreed to supply the UAE with the assistance required to help protect the Gulf nation from such incidents in the future.

Due to the Iranian attempt to expand its influence in the region,  Israel and the UAE have already been covertly cooperating for years prior to the normalisation of the relationships. Both countries have significantly improved their intelligence-sharing and military relations in order to address growing Iranian dominance and be able to defend themselves from any potential attacks.

<p>The post Israel provides air defence system to UAE first appeared on Isranomics.</p>

It has to be pointed out that not many people saw current challenges coming in the way they did, especially as the last year delivered double-digit gains and set multiple record highs. Now, to a certain degree, this had to do with an unprecedented trillion-dollar money production by the biggest central banks in the world that flooded the market with liquidity. However, this could not last forever and something had to give. 

Back in January 2022, there was a significant decline in global stock markets that halted in the summer. Wall Street enjoyed a month of bull run of almost 20% gain in the S&P 500 index. However, things started unraveling in the closing stages of August when Fed chair Jerome Powell announced his intention to fight inflation by raising the interest rates regardless of potential damage to the economy. And so he did, the interest shot up. His speech triggered bond market declines and paved a way for growing indications of the US and global recession.

However, there are other factors worth remembering when making investment decisions that continue contributing to the capital markets’ decline, keeping it deeply in the bear market territory.

Following the Russia’s invasion, fighting in Ukraine has persisted, seriously impacting the global energy sector. The commodity market has been in turmoil since the Coronavirus, and the geopolitical tensions in the China-Taiwan region as well as China’s draconian closures are fuelling the turbulence in the sector. Furthermore, the economy is being shaken by a developing real estate crisis within China itself. The Chinese government must work hard to avoid both an economic and a political disaster because of its population’s declining trust, despite recent signs of improvement in economic activity.

In Britain, a combination of an energy crisis, inflation, and political shocks led to the sterling being crashed, and with the country being outside of the European Exchange Rate Mechanism, economists fear that similar shocks may await the UK.

Protracted selloffs in the market have the potential to return indices to their annual lows. At this stage, there are all the required ingredients to make it happen – the Federal Bank and its counterparts around the world have already made it clear about their intentions regarding interest rates. As a result of the reduction in liquidity in the US, the 2-year treasury yields broke above 3.79%, a level not seen since 2007.

For many investors the last fifteen years have been almost a bliss as all markets, including real estate, shares, bonds, and cryptocurrencies, have been on an upward trajectory. However, this year all of these markets are moving south. This prolonged decline made some investors believe that the worst may soon be over and they would soon be swooping in to start buying. However, as one song goes, “I thought we hit rock bottom and then the floor gave out”. The issue is, when it comes to markets, the worst always comes as a surprise and it beats expectations.

And at the moment, there are reasons to be wary of such a scenario. The warnings have been coming from various directions. According to celebrity investor Ray Dalio, a 4.5% increase in interest rates would cause the stock market to fall 20%. The World Bank has issued a warning that in an attempt to rein in rising prices, central banks could create some serious pain for consumers. According to their assessment, this will result in a global recession in 2023. The likelihood of a “soft landing,” in which the Fed raises interest rates and the economy contracts gradually without experiencing a significant shock, is quickly shrinking. Investors are already starting to worry that the Federal Reserve will raise interest rates by one full percentage point this week. Simply put, a consensus has been building for a potential of further upheaval in the markets in the near term. As to the Israeli economy, due to its relatively small size compared to the world’s GDP, such a slowdown would be difficult to bypass and, therefore, it will likely be reflected in the local stock market performance. The good news is that all bear runs eventually finish, and this could be a buying opportunity that no investor would want to miss.

<p>The post Did the stock market reach the bottom or is the worst still to come? first appeared on Isranomics.</p>

<p>The post Elbit Systems wins deals worth $135 million in just two days first appeared on Isranomics.</p>

The annual policy speech was held in Jackson Hole in Wyoming, where there was a simposum of senior government economists and central bankers from all around the world joining the three-day conference. Because it serves as a place for policymakers to discuss the pressing economic issues on the international agenda and frequently sees major announcements and a flow of new ideas, the gathering is ascribed a special significance.

As Fed’s perspective focuses on a long term, the chariman emphasised that they will keep moving forward with its current policy until inflation approaches its objective of 2%. Powell stated that a restrictive policy will need to be kept in place for a while in order to restore price stability. The historical record clearly cautions against hasty policy easing. 

In the meantime, there are some indications that the inflation in the US is beginning to slowdown. For instance, the personal consumption expenditure price index, the Federal Reserve’s preferred inflation gauge, decreased from 6.8% in June to 6.3% in July.

In addition, the core inflation (which excludes more volatile food and fuel costs) slowed to a 4.6% annual increase, compared with 4.8% in June.

However, it is too early to make any conclusions and for the Fed to depart from its plans to constrain the economy to slow lending and spending and keep price increases under control. Fed officials are likely to wait for clear and persistent evidence before bringing any changes. 

The speech that lasted eight minutes caused a spectacular market sell-off, with the S&P 500 index falling more than 3%. This is the index’s largest decline since June, when the US stock market lost $14 trillion in value. All but six of the companies that make up the stock benchmark saw their shares fall.

<p>The post Powell’s speech rocks markets first appeared on Isranomics.</p>