Italy’s pension U-turn would try markets’ patience 10 Jan 2018 Centre-right parties, frontrunners in March elections, have vowed to scrap a key pension reform passed during the 2011 crisis. The law is rigid, but axing it would hurt young Italians and widen Rome’s fiscal deficit. Investors would have a reason to avoid Italian debt.
China’s U.S debt talk reveals weak trade-war hand 10 Jan 2018 Beijing may slow or halt Treasuries purchases. It’s the biggest holder of Uncle Sam’s liabilities, so in theory the People’s Republic has leverage as the White House mulls imposing tariffs. As with other measures China could take, though, it would cause damage at home.
Chancellor: Bitcoin will never be real money 9 Jan 2018 The leading crypto-currency has monetary characteristics. But without state backing and a means for circulating credit in the capitalist economy it lacks the nature of money and is destined to fail. That’s why some more modest bitcoin alternatives, like ripple, look more promising.
Cold snap chills prospects of U.S. coal subsidies 9 Jan 2018 The federal energy regulator nixed Energy Secretary Rick Perry’s proposal to prop up nuclear and coal power. Instead grid operators will be asked how to improve energy reliability. That’s more logical, especially after bad weather showed no fuel source is immune from disruption.
German workers may frustrate ECB’s inflation hopes 9 Jan 2018 Industrial staff in Europe’s biggest economy are striking for higher pay. They may, however, trim wage demands in return for flexible working. If pay pressures fail to flare in such a tight labour market, the European Central Bank can hardly count on them surfacing elsewhere.
Rising won could help drive change in South Korea 9 Jan 2018 Seoul appears to be reverting to a tired pattern and intervening to cap a surging currency. The authorities should instead welcome the rise as prodding big exporters to raise their game. While growth might take a hit, the long-term gains in competitiveness could be considerable.
Steyer’s largess a double-edged sword for Democrats 8 Jan 2018 Billionaire Tom Steyer plans to shower $30 mln on Democratic candidates this year. That might help the party take control of the House in the U.S. midterm elections. But the hedge funder’s parallel campaign to impeach President Trump could complicate their task if they win power.
Deutsche Bank is portent of investment bank gloom 8 Jan 2018 The German lender says fourth-quarter sales and trading revenue was 22 percent lower than a year earlier. Low volatility and weak trading revenue suggests rivals can expect similarly lacklustre results. But Deutsche’s dependence on trading income makes it especially vulnerable.
Sutherland embodied ups and downs of globalisation 8 Jan 2018 Former European Commissioner, trade chief and BP chair Peter Sutherland, who has died at 71, worked to make it easier for goods, capital and people to cross borders. His triumphs were blotted by corporate failures. Yet his legacy deserves to survive the current backlash.
British shoppers are a shaky economic backstop 8 Jan 2018 Consumer spending on Visa cards in 2017 was the weakest in five years. Profit warnings from retailers Mothercare and Debenhams add to the glum outlook. Despite easing cost inflation and a tight job market, customers who have kept the UK economy moving are becoming less reliable.
Trump would be wise to ease up on Seoul 8 Jan 2018 Talks just kicked off to amend a trade pact with South Korea, one the U.S. president has threatened to terminate. The original deal did not live up to American expectations, but there are bigger items on the export agenda. And a united front against North Korea is more important.
Tight U.S. labor market may finally move Fed 5 Jan 2018 December’s relatively weak jobs and wage growth gives policymakers a breather. But with 2.1 mln positions created in 2017 and unemployment historically low, long-awaited pay increases - along with new tax cuts - could soon start stoking inflation. That would force the Fed’s hand.
Greek banks’ sour loans face reality check in 2018 5 Jan 2018 Lenders plan to shrink their bad debts by 37 pct over two years, including through sales. A recovering economy and falling government bond yields should help. But without a clearer picture of what buyers might pay, shareholders have little clarity over how much pain lies ahead.
Anti-euro debate rears its head in Italy 5 Jan 2018 Northern League leader Matteo Salvini has reiterated his opposition to the single currency. Growing Italian discontent with the EU could make an anti-euro stance a vote-winner in upcoming elections. Despite Europe’s economic revival, monetary union remains a political target.
Breakingviews predicts a frothy, frustrated year 5 Jan 2018 Money is cheap, the global economy is motoring, and tech is reshaping the world. Populism is still driving discord and uncertainty, but markets are ebullient. From elections to electric cars, we offer a series of insights into what 2018 has in store for companies and economies.
Viewsroom: Debt markets set for wild ride 4 Jan 2018 More government borrowing and less central bank buying will force bondholders to fend for themselves, Breakingviews predicts. Plus, passive funds will force out a CEO, electric vehicles give gasoline cars a run for their money and soccer clubs’ spending splurge will intensify.
Debt markets will call time on equity rally 4 Jan 2018 U.S. stocks are rallying in tandem with bond yields. In the past 30 years, that has never happened for more than four consecutive quarters. If the pattern holds, one or the other will slide within six months. It’s more likely to be equities.
Investors will only curb CEO pay if forced 4 Jan 2018 The bosses of top UK companies have on average taken a pay cut, according to a new report. Fears of a political backlash made investors more apt to vote against chunky remuneration packages. The restraint may be fleeting unless a weakened government can keep up the pressure.
Germany will follow money in EU top jobs carve-up 4 Jan 2018 Jockeying to replace the region’s most powerful people, including European Central Bank boss Mario Draghi, will begin in earnest in 2018. Proposed new posts like a euro zone finance minister complicate the contest. Berlin will prefer control of purse strings to interest rates.
A 400 pct Chinese broker premium begs explanation 4 Jan 2018 Fog is thickening around a missing tycoon’s embattled empire. One holding of Xiao Jianhua’s Tomorrow Holdings, Hengtou Securities, said nine owners will sell a stake to CITIC Guoan for $1.4 bln, or five times the market price. Such mysteries undermine Hong Kong's investor appeal.