Turkey set for good year before economic reckoning 27 Dec 2019 More fiscal and central bank stimulus will push growth towards President Tayyip Erdogan’s 5% goal for 2020. Yet inflation will be restrained thanks to lira stability. A credit binge encouraged by Ankara’s policies can last the better part of a year before screeching to a halt.
Beijing will dilute Hong Kong with Shenzhen 27 Dec 2019 Protests in the former British colony endanger China’s gateway to international markets. Past attempts to turn neighbouring Shenzhen into a rival financial hub have been half-hearted. Now Beijing has reason to press harder, especially with bold reform to capital controls.
China’s e-yuan will be more cryptic than crypto 23 Dec 2019 Beijing is primed to launch the world's first digital sovereign currency in 2020. The rollout will give authorities a powerful tool to tackle fraud and money laundering. Deploying the breakout innovation into the wheeling-dealing banking system could also aid a cleanup.
New BoE boss is only partly the safe choice 20 Dec 2019 Andrew Bailey is the next governor of the Bank of England. His CV is more complete than internal rivals, and Brexit arguably means the role needs an unflashy Brit more than a carbon copy of Canadian incumbent Mark Carney. But Bailey will need to prove that his BoE is independent.
Viewsroom: Jack Dorsey’s heroic year ahead 19 Dec 2019 From banning political ads to developing cryptocurrency plans, the CEO of Twitter and Square has been politically more astute than rivals like Facebook. That sets him up for a good 2020. Also: the different ways that shareholders, the Fed and M&A bankers will tackle climate risk.
Audio feed goof makes BoE look naive – and stingy 19 Dec 2019 Traders got faster access to Bank of England briefings by paying the contractor responsible for internal broadcasts. The BoE should have better monitored what was happening. But the problem could have been avoided altogether had it invested in overhauling its two-speed system.
Jay Powell has golden chance to avow independence 18 Dec 2019 The Fed boss can distance himself from President Donald Trump by nudging the U.S. central bank to join a global green network that already includes 51 peers. This will defuse criticism that he has been too malleable on rates. And it may even help to save the planet from frying.
Lebanon’s financial alchemy is losing its magic 18 Dec 2019 The world’s third most indebted nation – with borrowings north of 150% of GDP – may be careening toward a default and an IMF rescue. A complex financial engineering scheme that propped up the banking system is now sputtering. Local banks and foreign bondholders could take a hit.
Hadas: Maybe Paul Volcker wasn’t all that great 17 Dec 2019 The U.S. central banker, who died on Dec. 8, supposedly broke the 1970s inflation with recession-inducing high interest rates. After 40 years of falling inflation worldwide, his contribution looks less certain. He also missed an early chance to criticise financial deregulation.
New Bank of England boss may request magic powers 16 Dec 2019 The name of the UK central bank’s next governor is expected shortly. He or she will hope for a smooth exit from the EU. A badly done Brexit could bring recession, inflation, a currency crisis, fiscal incontinence and political interference. If only there was an effective spell.
ECB feuding will have a new front in coming year 11 Dec 2019 Christine Lagarde took the helm of the European Central Bank with a promise to review strategy. A debate on how to define its price stability mandate will embolden those rate setters who are fed up of ultra-loose policies. The battle will be bitter and played out in public.
Wall Street finally gets some capital satisfaction 9 Dec 2019 The likes of JPMorgan, BofA and Goldman Sachs have barely benefited from Trump administration regulatory rollbacks. But recent repo ructions will spur the Fed to change the rules so that banks won’t have to keep as much cash in reserve. It’ll be a small but welcome relief.
Now we’ve lost Paul Volcker, we must find another 9 Dec 2019 Opposed by politicians and economists, the former Fed chairman raised interest rates, overcoming inflation in the 1980s. A great central banker needs monetary policies that fit their time as well as rarer qualities like determination and integrity. Volcker had both.
Look out for Narendra Modi’s big economic surprise 9 Dec 2019 India’s prime minister is less than a year into a second term and growth is faltering. There’s a crisis of confidence. He surprised markets in good and bad ways in his first term. Investors should prepare for radical actions his government might take to jump-start India in 2020.
Sweden will manage a singular rate rise 6 Dec 2019 The Nordic country’s rate setters want to lift the policy rate out of sub-zero territory in December. Sluggish growth, lower inflation and trade weakness mean they face a high burden of proof to justify such a move. Their explanation may not stretch to a second hike anytime soon.
Shinzo Abe fires off another feeble arrow 5 Dec 2019 Japan’s latest fiscal stimulus package, worth just over $120 billion, will avert stagnation or worse. But a recent consumption tax hike and slower global activity pose risks that policymakers lack the firepower to tackle. Healthy growth and inflation will prove elusive.
TCI plays outrider to Mark Carney’s climate drive 2 Dec 2019 Chris Hohn’s hedge fund plans to penalise directors at companies who don’t publish climate change data. If others follow suit, it could boost the Bank of England governor’s push for transparency. What’s less clear is whether greater disclosure delivers investment rewards.
Aussie rate setters on a slow road to asset buying 2 Dec 2019 Consumption is weak and joblessness is rising. The central bank has room to cut rates from a record low of 0.75%, and can resort to bond purchases after that. But Governor Philip Lowe wants fiscal policy to do more. He can ramp up pressure on the government by taking his time.
Hadas: GDP is a measure ready for retirement 27 Nov 2019 The fuss over China’s revised growth statistics points to peak uselessness of the 85-year old Gross Domestic Product. Too many countries mess with a number which gives slow, blurry readings of the economic pulse, especially for megacities. The future is “now-casting”, and more.
Fed’s stability is an appreciating asset 20 Nov 2019 Ambassador Gordon Sondland implicated not just President Donald Trump, but also the vice president and secretary of state in the House impeachment probe. The central bank’s independence should comfort investors – unless Trump starts threatening Chair Jay Powell’s job again.