Euro rally is on probation 23 May 2017 The single currency is at six-month highs above $1.12. The euro zone economy’s improving health is being acknowledged, and French political risk has diminished even as it has risen in the United States. Yet options prices show little conviction that the gains will continue.
Suicide bombing brings tragic twist to UK election 23 May 2017 The attack that killed at least 22 concertgoers in Manchester is Britain’s deadliest in more than a decade. Its aftermath will dominate the remaining two and a half weeks of campaigning. As in other European countries, economic issues will take a back seat to security concerns.
Only Russia can make OPEC great again 23 May 2017 Moscow is giving the cartel more pricing clout. A mooted deal to extend output cuts and drain global crude stockpiles can only succeed with the continued support of the world’s biggest crude producer. With U.S. drillers recovering, it may be time to make the alliance permanent.
Germany is dealing with its bank-branch addiction 23 May 2017 Measly interest margins and rising capital requirements are forcing the country’s savings institutions to cut costs and shut branches. Germany still has more banks than petrol stations, but the shift is helpful, and may benefit big lenders like Deutsche Bank and Commerzbank.
India’s RBI risks a reputational downgrade 23 May 2017 The central bank may pick credit agencies to rate stressed loans, and help pay for the job. It is a bid to stop borrowers shopping for good scores. That could force agencies to adapt. But the idea may lead the regulator further into commercial decision-making.
Zimbabwe takes monetary lunacy to the next level 22 May 2017 The African state suffered hyperinflation in 2007 after paying bills by printing its own currency. A decade on, it is doing so by printing U.S. dollars instead. The idea of conjuring foreign currency from nowhere with the tap of a keyboard sounds too good to be true – and is.
Time for UK to lose timidity on taxing property 22 May 2017 Theresa May has backed down on a so-called “dementia tax” following a backlash against older Britons using their homes to fund social care. How much the state should subsidise these costs is up for debate. But unearned housing equity should be taxed more.
Wasted time is U.S. healthcare’s big hidden cost 22 May 2017 America spends 18 pct of GDP on the medical-industrial complex, almost double most countries and for poorer results. Yet the figure excludes the effort of finding approved doctors, getting reimbursed and the like. That makes the potential gains of health reform even greater.
Two Irans go in different directions 22 May 2017 Reformist Hassan Rouhani was re-elected president in a landslide victory over hardliners. At the same time, U.S. President Trump placed the country firmly back into the “axis of evil”. The former ought to make Iran more investor-friendly, but it’s the latter that will shape its destiny.
Spain is beginning to look more like Italy 22 May 2017 Pedro Sanchez’s unexpected victory in Socialist primaries could weaken the already fragile minority government. The risk of a crisis is low, but a more fragmented parliament, similar to Italy, makes economic reforms harder, and undermines Spain’s call for European integration.
Hong Kong fights losing battle with property boom 22 May 2017 The territory is trying yet again to cool a red-hot real estate market. New curbs will make home loans less profitable for banks and increase down payments for borrowers. An acute land shortage and Chinese buyers' desire to diversify away from the yuan will limit the impact.
Saudis place $20 bln bet against U.S. dysfunction 21 May 2017 The Kingdom's pledge to Blackstone may turn into $100 bln of firepower aimed at upgrading American infrastructure. The problem is finding states and cities that want private cash. Riyadh will need a lot more patience than with its equally huge SoftBank-led tech venture.
OPEC caught in vicious Permian cycle 19 May 2017 As President Trump heads to Saudi Arabia, the oil cartel looks set to extend production cuts. It may buoy prices and keep drills running. But efficient U.S. wells in the Permian and elsewhere will benefit most, limiting increases. It’ll be hard for OPEC to regain the upper hand.
Review: Democrats’ chief firebrand fumbles message 19 May 2017 Elizabeth Warren's "This Fight is Our Fight" reads like a marker for a 2020 White House run. The senator from Massachusetts targets Donald Trump, lobbyists and Wall Street. Tales of struggling Americans are engagingly woven into the outrage. But her rote views limit her appeal.
ECB snared by bond-buying ambiguity 19 May 2017 European lawmakers have called for more transparency from the European Central Bank over its corporate bond purchases. The demands are flawed: the ECB discloses quite a lot and clarity can backfire. Yet it’s a reminder of the risks from central banks meddling in private credit.
Active-passive battle will end in ceasefire 19 May 2017 Index-trackers are eating into traditional investment managers' business – and could soon own half of U.S. equities held in funds. Even so, managers can find refuge in some places, like emerging-country debt. Shrinking market share may also help active investors outperform.
Japan’s job market is more brittle than it looks 19 May 2017 Unemployment is 2.8 pct and the country is on its longest growth streak in a decade. But some can only find part-time work, unions speak for just a minority, and productivity is patchy. So wage growth is anaemic - thwarting Premier Shinzo Abe's push for more inflation.
Alpha-seekers hedge their bets on America 18 May 2017 Despite being rejected by the White House, erstwhile fund manager Anthony Scaramucci is keeping the faith in Trump and his agenda. Many billionaire investors at his Sin City shindig are shorting the trade. Their money is on making European and emerging-market returns great again.
Guest view: U.S. energy independence is flawed aim 18 May 2017 The Trump administration is making oil self-sufficiency a top priority. Pursuing such a policy, however, puts the country at risk of missing out on important benefits of being a global buyer and seller, EY energy analysts argue. Interdependence, they say, is the better option.
Cox: Time to contemplate Mike Pence-onomics 18 May 2017 There is a whiff of impeachment in the air in Washington. That may still be an unlikely outcome, but Donald Trump's flawed stewardship of the Oval Office should be inspiring risk managers to run their rules over the fiscal views of the vice president from central casting.