Emperor Xi gets new clothes 28 Oct 2016 China's Communist Party named President Xi Jinping as its "core" leader - a title previously granted to icons like Mao and Deng. But Xi needs more than titles to implement tough reforms; he needs provincial allies and a viable vision for economic policy. He may have neither.
Resilient UK growth adds to policymakers’ quandary 27 Oct 2016 GDP rose by 0.5 pct in the third quarter as the economy barely broke its stride after Britain voted to leave the EU. The good news makes it harder for the government and Bank of England to justify a hefty stimulus. But if things do get worse their response may come too late.
Fair winds not enough for Deutsche and Barclays 27 Oct 2016 The European banks gained from Wall Street’s bond trading fervour in the third quarter. But legal costs dragged return on tangible equity down to 2 pct at Deutsche and 3.6 pct at Barclays. The UK lender has fewer troubles than its German peer, but both need good times to last.
Gutsy MPS turnaround tackles problems it can 25 Oct 2016 Italy’s sickly bank has devised an ambitious scheme to boost profitability and coax investors to back a 5 billion euro recapitalisation. There are some missing details, such as how a debt swap will work, but it’s a valiant turnaround plan. The main risks are outside MPS’ control.
Free trade can survive its Wallonian wobble 25 Oct 2016 The tiny Belgian region is holding up a trade pact between Europe and Canada. That doesn’t mean such deals are impossible, though - they just need even more time and creative thinking. The messy process also undermines the notion that ordinary people have no say in globalisation.
Bonds’ impersonation of stocks upends investing 24 Oct 2016 Debt investors are increasingly reliant on capital gains in a world of disappearing yields. This shift will force a rethink of old rules on how much money is ideally allocated to so-called safer fixed-income assets. Stocks and investments such as infrastructure stand to benefit.
Spanish government begins to make up for lost time 24 Oct 2016 The country's Socialist Party will allow acting Prime Minister Mariano Rajoy a second term, ending 10 months of political deadlock. His minority administration will now begin arduous tasks like cutting the budget deficit as the economy slows. A fractured parliament won't help.
Brazilian economy flirts with new virtuous circle 19 Oct 2016 The central bank is set to cut its key interest rate for the first time in four years. Inflation is easing, growth is set to resume, and Congress favors spending caps. Even state oil giant Petrobras now has a less batty fuel-price policy. It's a good start to a long journey.
Inflation is next nerve-jangler for investors 18 Oct 2016 After years of undershooting price targets, some rate-setters, including Mark Carney in Britain, are now talking about tolerating overshoots. Equity winners will vary depending on whether inflation is of the good or bad variety. But global bonds are losers either way.
Inflation shows up at wrong time for Mark Carney 18 Oct 2016 UK consumer prices are rising at their fastest pace in nearly two years. It should be a proud moment for the Bank of England chief, who has been struggling to achieve exactly this. Unfortunately, the pound’s fall is going to give him a bit too much of what he wanted.
Saudi bonds put Riyadh first and investors last 18 Oct 2016 The world's largest crude oil exporter is selling $15 bln of bonds. Demand will be strong even though Saudi is offering few insights into oil policy, regional strategy or the fiscal outlook. If the kingdom struggles to wean itself off oil, investors can expect bruising treatment.
Peru lights less populist path for Latin America 17 Oct 2016 New President Pedro Pablo Kuczynski combines business nous with patrician polish, a mashup of Argentina's and Brazil's leaders. Unlike them, though, he inherited a copper-fueled economy that leads the region in growth, giving him leeway for reforms and the fight against poverty.
Breakdown: The dismal art of forecasting sterling 14 Oct 2016 Most economists agree the pound has further to fall, but there is a wide range of views on how far. Long-term forecasts are an unfortunate necessity, but they are stab in the dark when it comes to a currency that is more in the thrall of politics than economics.
German labour law not so bad, unless you’re a bank 13 Oct 2016 Only in Venezuela and China is it harder to sack workers. Teutonic industrial companies have learned to cope and job creation is booming. The only catch is that Germany’s labour-friendly rules are ill suited to the generous pay and hire-and-fire culture of global finance.
America’s soft power gets welcome lift from Dylan 13 Oct 2016 The Swedish Academy awarded the singer-songwriter the Nobel Prize for Literature. It's a reminder to an electorate enduring perhaps the tawdriest, most divisive presidential campaign ever that a nation's strengths are not confined to its politics or economic might.
British retailers have leverage over Unilever 13 Oct 2016 The maker of Dove soap wants supermarkets like Tesco to pay more for its goods as the pound weakens. They can’t easily pass that cost on to shoppers. Grocers have two reasons to play tough: Unilever's 15 pct operating margin, and their access to the consumer.
BoE’s credit bazooka is misfiring – again 13 Oct 2016 Bank of England Governor Mark Carney’s corporate bond-buying programme is failing to lower company borrowing costs. As in 2009, the bank can be accused of not being aggressive enough. Then again, Prime Minister Theresa May’s lukewarm support doesn’t help.
Trump candidacy makes for bad return on business 12 Oct 2016 The U.S. presidential hopeful has removed his "shackles" and gone after critics in his party. Along with boastful bigotry and sexism, the run may be damaging the real-estate mogul's brand. Parlaying political stardom into a news network is becoming Trump's best financial option.
South Africa is making the worst of a bad job 11 Oct 2016 State prosecutors have told Finance Minister Pravin Gordhan to appear in court on fraud charges, just days after he is supposed to deliver a budget to ease fears about a credit-junking. Such antics needlessly exacerbate Pretoria’s economic problems – including a sliding rand.
VTB snub only hurts UK if American banks follow 11 Oct 2016 Russia's second largest lender may pull investment bankers from London because of Brexit. But VTB's existing base in Vienna is unlikely to suit other big banks. And the Wall Street giants London would actually miss are unlikely to make big logistical decisions in a hurry.