Italian budget climbdown would be just a start 26 Nov 2018 The anti-austerity government may trim its 2019 budget deficit target to defuse a clash with the European Commission. That would ease financial market tensions which risked undermining any benefits of extra spending. The stimulus is still being spent in the wrong places, though.
MTN’s $8 bln Nigeria spat requires Goldilocks fix 26 Nov 2018 The African phone giant is close to ending a row with the West African nation over dividends. A face-saving deal will repair ties in its biggest market. After protesting its innocence, a reported $800 mln settlement looks excessive. But too little will keep MTN in Abuja’s sights.
Taiwan’s poll upset can ease China tensions 26 Nov 2018 Voters battered President Tsai Ing-wen and her independence-leaning party in local elections, despite strong economic growth. The opposition is already reaching out to Beijing. That may augur a welcome period of calmer cross-strait relations, just as trade war storms strike.
How Nissan could get the upper hand with Renault 23 Nov 2018 After ousting Chairman Carlos Ghosn, the Japanese carmaker wants more say in an unequal alliance. Given the partnership’s lopsided governance, Nissan’s best bet would be to snap up shares in Renault, neutralising its controlling stake. Ghosn’s exit makes a hostile raid easier.
Brexit vote plan is more twerp than TARP 23 Nov 2018 Market panic helped the U.S. government push its 2008 bank bailout through Congress. Theresa May might hope for a similar outcome if the UK parliament rejects her deal to leave the EU. The flawed analogy misunderstands markets, and forgets that Britain’s crisis is self-inflicted.
Island gambit hints at Beijing’s new lower gear 23 Nov 2018 U.S. Vice President Mike Pence has intimated China intends to drown Pacific nations in a sea of debt. The actual approach, however, has been reluctantly pragmatic, as in a move to delay repayments from Tonga. The result may be a more sustainable version of the Belt and Road plan.
Saudi stock market’s “MbS discount” to get worse 22 Nov 2018 Since Jamal Khashoggi’s murder in October, foreigners have dumped Riyadh-listed assets. Donald Trump’s indifference to the crown prince’s alleged role in the killing offers some reprieve. But the kingdom’s stability and long-term economic progress have been permanently impaired.
Tanzania’s nuts policy is so bad it’s good 22 Nov 2018 President John Magufuli is shelling out $320 mln to buy all its cashew crop at a hefty premium to help farmers. The government faces a big loss. Failure would at least expose the folly of ham-fisted state intervention, at odds with Africa’s gradual liberalisation.
Viewsroom: What’s next for Brexit? 21 Nov 2018 Cabinet resignations, an angry coalition partner and a skittish currency greeted UK Prime Minister Theresa May’s draft agreement to quit the EU. Breakingviews columnists examine whether the current mess leads to Brexit with an EU deal, without a deal, or even to a new referendum.
Italian savers send Rome a warning on debt 21 Nov 2018 Private investors are shunning an issue of sovereign bonds reserved for them. Lacklustre interest in the “BTP Italia” undermines hopes that households will replace fleeing foreign buyers. It’s also a first sign of domestic discontent over Italy’s budget clash with the EU.
G20 showdown hangs on big numbers, big egos 21 Nov 2018 Donald Trump and Xi Jinping’s upcoming meeting is weighing on markets. Despite discord among his aides, the U.S. president has the autonomy to strike a deal if China offers the right incentives. His interest in trade balances and historical strongmen creates an opportunity.
Hadas: Dumb ideas undermine Brexit and Facebook 21 Nov 2018 Freedom is simple. History is on our side. Fantasy is safe. These simplistic quarter-truths helped pitch Britain into a political crisis, and encouraged the social network to ignore a slew of warning signs. Sadly, the damage done by weak thinking is hard to undo.
Cox: Trump is surprisingly popular – in China 21 Nov 2018 Figures in the PRC’s private sector are discreetly rooting for the U.S. president. Their interests are not served directly by most of his trade demands. But the absence of domestic pressure on Xi Jinping to open markets further makes Trump’s push for reform the only game in town.
Malaysia claim of Goldman cheating is a bit rich 21 Nov 2018 Prime Minister Mahathir Mohamad’s administration says the country was deceived and wants back $600 mln the investment bank made arranging bonds for disgraced 1MDB. Goldman’s compliance was weak, but the last regime knew what it was buying. There’s plenty of blame to go around.
RBI’s piggy bank can stand a New Delhi raid 20 Nov 2018 Under government pressure, India’s central bank will consider cuts to over $100 bln of reserves. Its capital cushion looks generous next to BRIC peers, but the country’s large budget deficit, its dependence on foreign capital and the danger of a bad precedent demand caution.
Facebook’s higher calling is now a liability 19 Nov 2018 The social network is getting grief from U.S. lawmakers for hiring Washington consultants to fight critics. Many companies do that, including older tech firms. Facebook, though, has styled itself as more than just a company. Mark Zuckerberg is now tripping up on that high bar.
Euro budget is a withered carrot for fiscal rebels 19 Nov 2018 France and Germany want to set up a pot of money to fund investment in the euro zone. The fund will only be available to those who comply with EU fiscal rules. The idea is a nice one but there may be too little money and too much complexity for the incentive to be effective.
Watch UK bonds to see when there’s a real crisis 16 Nov 2018 The pound suffers every time concern flares that Britain may crash out of the European Union. But gilts strengthen since bleaker economic prospects make higher interest rates less likely. The clearest sign investors have had enough would be when both weaken at the same time.
Rates pain compounds UK banks’ Brexit misery 16 Nov 2018 Shares in British lenders fell after government resignations increased the chances of Britain failing to agree a deal with the EU. Investors are pushing back hopes for higher interest rates. That leaves banks stuck with low margins on top of political and economic uncertainty.
Europe can play a waiting game with Italian rebels 16 Nov 2018 Italy’s anti-austerity budget flouts Brussels’ fiscal rules. Declaring Rome in breach and imposing penalties would fuel euro scepticism ahead of key European elections. Better to tone down the rhetoric, and let a slowing economy and hostile markets weaken the executive’s hand.