Italy will find itself in market crosshairs again 19 Dec 2016 With rates rising, countries with high debt and fragile growth are vulnerable. Italy's political weakness makes tough choices on reform or spending cuts even harder. Even though the European Central Bank will keep buying government bonds in 2017, investors' nerves will be tested.
Russia lacks cash and motive to rebuild Syria 16 Dec 2016 After the last Iraq war, U.S. reconstruction cash poured in. Were Aleppo's collapse to prompt the end of the war in Syria, Moscow's economic fragility would make it unlikely to follow suit. An EU populist backlash against a fresh influx of fleeing Syrians helps Russia anyway.
Brexit could give Madrid its day in the sun 15 Dec 2016 Unlike Paris or Frankfurt, the city is not a top contender to attract financiers dislocated by Brexit. But Spain’s capital has attractions, like low costs and a friendly tax regime, that could draw in other sectors. Vitamin-D starved corporate refugees may take the bait.
Brexit transition deal offers Lloyd’s scant cover 15 Dec 2016 The London insurance market is pushing ahead with the launch of a subsidiary that could conduct EU business after Britain leaves the bloc. Lloyd’s of London is not waiting to see whether politicians can secure extended access to the single market. Banks may take a similar view.
Small step for some is giant leap for Uzbekistan 14 Dec 2016 The landlocked central Asian country has poor human rights and low foreign investment. But new President Shavkat Mirziyoyev has made encouraging changes, like restoring air links with Tajikistan and scrapping visas for some foreigners. There is far to go, but it’s a start.
Brexit transition may ease not remove uncertainty 13 Dec 2016 UK Chancellor Philip Hammond sensibly wants banks to have continued access to Europe's single market after Britain's departure to protect financial stability. That would give them longer to make alternative plans - but also risks prolonging doubts about the final arrangements.
UniCredit’s bankers should avoid 2012-style panic 13 Dec 2016 The Italian bank's 13 bln euro cash call is almost double its capital raising five years ago, which nearly imploded. The current one also takes place in the teeth of domestic political upheaval. Yet today's UniCredit is healthier. Underwriters needn't end up holding the baby.
UniCredit detox is key moment in Italy bank reboot 13 Dec 2016 A cost cull, bad debt purge and mega-cash call mean the country's biggest bank merits a much higher valuation. The risk is that investors see smaller Italian peers as weak in comparison. Yet with the top two banks solid and MPS being sorted, cleaning them up is less daunting.
Radical Modi could leave a trail of destruction 13 Dec 2016 New Delhi is scrambling to show its banknote recall was worthwhile, after cash flooded back faster than expected. Premier Narendra Modi's pursuit of illicit wealth is well intentioned. But aggressive tactics endanger everything from central bank credibility to fiscal discipline.
Abe is biggest winner from Japan’s GDP overhaul 9 Dec 2016 Adopting UN standards makes the economy look 6 pct bigger. That does nothing to boost growth, dynamism, or inflation. But it does make Premier Shinzo Abe's goal of building a $5.2 trln economy more achievable. It also highlights how Japan is underplaying its research prowess.
China gets a good cop as Trump’s primary emissary 8 Dec 2016 The president-elect mollified Beijing with his ambassador pick. The selection of Iowa Governor Terry Branstad, who has personal connections with Xi Jinping, calms waters troubled by Trump's tough talk. As other hardliners are brought in, Branstad will need to pack a surfboard.
Greece turns from Sisyphus into Hercules 6 Dec 2016 Euro zone lenders agreed to rejig some of its debt, which adds to the likelihood that future financial support isn’t just good money thrown after bad. Greece is no longer pushing a rock up a hill, but some pretty hefty tasks still stand between it and economic recovery.
Singapore stresses under a wealth of worries 6 Dec 2016 Morale is lousy in the city-state. The trade-reliant nation is heading for a recession and China is flexing its muscles. Singapore's strategic direction and its outsize influence on the global stage are both in question. There are no easy fixes to restore the Lion City's roar.
“Irrational exuberance” gets a new lease on life 5 Dec 2016 After Alan Greenspan coined the phrase exactly 20 years ago, it took three years before the tech bubble burst. Markets are spirited again, by low rates and Trump. As the Fed acts and the president-elect pushes his policies, asset values may face a quicker reckoning this time.
Bank clean-up opportunity is Italy’s to waste 5 Dec 2016 The failed referendum need not cause a crisis if UniCredit completes its rights issue and fellow lender MPS can be quickly stabilised. Political turmoil and weak growth, though, could push up bad loan levels. A new "bad bank" would help, but political will may be lacking.
South Korea can offer roadmap to cashless Asia 2 Dec 2016 The country wants to go coinless by 2020. That sounds achievable. Electronic payments are already commonplace in one of the most wired nations in the world. It’s the latest currency experiment in the region that offers valuable lessons for a continent hooked on cash.
Review: China’s doomed anti-corruption campaign 2 Dec 2016 Tales of Chinese officials enriching themselves are so prevalent they no longer astonish. President Xi Jinping's anti-corruption campaign has penalised bad behaviour. But in "China's Crony Capitalism", Minxin Pei argues that state ownership makes any sustained crackdown futile.
Trump Treasury chief an illogically logical pick 30 Nov 2016 Steven Mnuchin's Wall Street past will rankle Democrats. But unlike many on the president-elect's team, he's neither an ideologue nor a populist – and well qualified for the job. He's also bipartisan and relatively reserved. His nomination bodes well for fiscal policy.
Dollar strength spells more U.S. bond weakness 30 Nov 2016 As emerging market currencies wilt against a resurgent greenback, countries like India are dipping into their war chests to sell dollars. More may have to follow suit. Sooner or later, this will involve selling Treasuries. It’s more bad news for the battered U.S. bond market.
UK takes timid tilt at corporate governance piñata 29 Nov 2016 The government has singled out executive pay, board representation and unlisted firm oversight for reform. Scandals like BHS make it reasonable to do so. But the need for UK firms to remain competitive post-Brexit perhaps explains why the proposals aren't very adventurous.