Dollar rally comes at exquisitely awkward time 30 May 2018 The greenback's recent strength creates a policy headache. If sustained, it’ll reheat real estate, pull capital from emerging markets and complicate Trump's attempts to push U.S. exports. And it’ll buttress the currency’s dominance despite rising doubts about the U.S. government.
Doom loop comes back to haunt Italian banks 30 May 2018 The country’s lenders have boosted their capital since the 2011 crisis, sit on a large pile of deposits and are cutting bad loans. But they still have almost 340 bln euros of Italian government bonds. This means they are vulnerable to any loss of confidence in Italy’s debt.
Cox: Peter Thiel’s next target should be Infowars 30 May 2018 The tech billionaire financed a lawsuit that bankrupted Gawker and said he’d help others challenging similar sites flouting First Amendment freedoms. A complaint by Sandy Hook families against conspiracy king Alex Jones provides a test for Thiel’s democratic bona fides.
Brazil’s truckers drive toward a fiscal hole 29 May 2018 Protesters demanding lower fuel prices have won concessions from the Temer government. But the specter of revived subsidies and state meddling in oil giant Petrobras hit investor confidence and the real currency, part of the truckers’ problem. Fiscal laxity is not a solution.
Trump moves on China give investors whiplash 29 May 2018 Congress hopes to stop the U.S. president from rolling back penalties on telecoms manufacturer ZTE. The White House also wants tariffs on $50 bln in Chinese imports. It would be unwise to tune out Trump’s good-cop-bad-cop tactics, as lawmakers can only do so much to rein him in.
Only Italy can save itself from self-inflicted woe 29 May 2018 Investors are spooked by the prospect of a eurosceptic government pushing up debt, prompting an exit from the single currency. Contrary to 2011, Italy is the cause of the crisis, rather than a victim. A change of direction depends on voters, not the European Central Bank.
Political crisis exposes Italy’s euro fault line 28 May 2018 The president rejected the anti-establishment government over concerns it was plotting to force the country out of the single currency. The resulting standoff will likely lead to snap elections. Radical parties will now have to come clean about their plans for the euro.
Colombia faces an anthology of Latam challenges 25 May 2018 The Andean nation’s next leader will have to embrace fiscal discipline, make a troubled peace accord work and overcome anger at corruption among the powerful – plus oil and drugs. Neither likely winner of Sunday’s first-round election looks to have all the tools needed to cope.
Investors in Italy sell first, ask questions later 25 May 2018 The radical government is not yet in place, but investors are not giving it the benefit of the doubt. Fears of a clash with the EU that forces Italy out of the euro have hit the value of shares and bonds. Party leaders’ reluctance to provide reassurance adds to market jitters.
OPEC supply easing is more reset than U-turn 25 May 2018 Saudi Arabia and Russia may lift oil output by 1 million barrels per day. Though that could knock prices, production of the black stuff will be more in line with the cartel’s previously agreed curbs. It’s a more far-sighted plan than allowing the value of crude to keep rising.
Viewsroom: America sees red on China trade deal 24 May 2018 Getting Beijing to force companies to buy more U.S. soybeans and oil may help the Trump administration claim a numbers victory. But it reinforces China’s statist instincts while ignoring most U.S. business beefs with Sino-American trade. Plus: has Tencent hit a peak?
Autos investors too quick to call Trump’s bluff 24 May 2018 German carmakers export a ton of vehicles, yet their stocks fell just 3 pct after the U.S. president threatened import tariffs. It implies they think Washington is just posturing, or that BMW and the like can mitigate the impact. That may prove to be overly optimistic.
Italy premier’s to-do list would tax a veteran 24 May 2018 Newcomer Giuseppe Conte has vowed to defend the country’s interests in all quarters. If confirmed by parliament, he will face EU conflict on an upcoming budget, the future of Alitalia and Monte dei Paschi, and new asylum laws. All would be tough even if he wasn’t a total novice.
U.S.-China trade gap is best filled with software 23 May 2018 Beijing plans to shrink the $375 bln surplus by buying commodities like oil and soybeans. Better to import intellectual property, and pay for the millions of unlicensed copies of Microsoft and Adobe products running in China. Local firms could use the productivity upgrade.
Trump indulges China’s statist instincts on trade 22 May 2018 To spare Chinese telecoms giant ZTE from extinction, its execs will be scapegoated for violating sanctions, averting an export ban. Beijing will also order firms to import more U.S. goods. Washington is effectively encouraging command, rather than market, economics in China.
Italy’s next economy minister is the one to watch 22 May 2018 Radical parties have proposed little-known academic Giuseppe Conte to head their government. Yet the economic portfolio matters more for the indebted country’s future. The new minister’s attitude towards the euro will go a long way towards determining investors’ faith in Italy.
UK’s tough-guy act on Russia can only go so far 21 May 2018 Britain’s delay over the renewal of Roman Abramovich’s visa comes against the backdrop of a wider clampdown on Russian oligarchs. Its sanctions on Moscow, however, contain holes. Closing them requires EU support and a readiness for the City to lose out in the crossfire.
Italy has room to bluff its way with Europe 21 May 2018 The likely government’s plans to boost spending and keep Monte dei Paschi state-owned break European rules. A revived economy, low rates and weak EU leadership give it a better hand than previous rebel Greece. And Europe needs to avoid a clash that could end the single currency.
EU’s Iran sanctions riposte is late and lame 18 May 2018 The bloc took 10 days to come up with a plan that will give its companies cover if they defy U.S. restrictions. That’s unlikely to stop businesses pulling out of the Islamic Republic. The dollar’s dominance in the financial system limits Europe’s ability to offer real protection.
UK’s costly royal wedding is worth every penny 18 May 2018 The marriage of Prince Harry to Meghan Markle may cost taxpayers as much as 30 mln pounds. If the transatlantic union prompts a small increase in American tourism, the expense can be recouped. In an era of isolationism and political volatility, it’s an efficient soft power boost.