Markets Archives - Page 384 of 729

China’s Global Influence in Context

The rise of China has created new uncertainties. A crucial question is whether China actively seeks an alternative to the existing US-led liberal regional order. In addition, if it does, what sort of order would it be?

In 2000, Aron Friedberg warned enthusiasts of multilateralism against exaggerating the ‘pacifying’ effects of regional trade. Friedberg predicted that the more economically powerful South Korea and China became, the more they would seek to undermine Japan’s regional status and eventually confront the United States.

Why is Japan (yen, bonds, negative interest rates) so Attractive?

The introduction of negative interest rates in Japan and the subsequent chance for yields has seen domestic investors move further out on the curve. They have also stepped up their purchases of foreign bonds.

In three weeks (through March 4) since the negative deposit rate went into effect, Japanese investors bought JPY4.4 trillion of foreign bonds. This is the second most since at least 2001 (when Bloomberg’s time series began), trailing slightly behind the August 2010 flurry.

Gauging the Fed, and other Risks to Emerging Markets

EM enjoyed an extended rally last week, and it should carry over to the early part of the week. The Wednesday FOMC meeting poses a risk to EM, especially if markets continue to price in a more hawkish Fed. The dot plots and press conference will be very important. BOE and the Norges Bank meet this week, with the latter expected to deliver a 25 bp rate cut to 0.5%.

Corporate Defaults Expected to Soar, Weak Consumer Data Emerges

Expectations of corporate bankruptcies and debt defaults have skyrocketed, with America’s companies struggling to stay afloat.

Credit research firm, Fitch Ratings, has increased its high yield bond default prediction for 2016 by 33%, now saying that the high yield bond market, also known as the “junk bond” market, will see default rates of 6%, significantly higher than the historical average and about 300% higher than in 2015.

Is State Ownership of Zimbabwe’s Diamond Mines Misguided?

Zimbabwe, like many African countries, faces an ongoing struggle to secure fair compensation for its mineral wealth. The question of how to maximise government revenues from the mining sector is a complex matter.

However, turning the sector over to state-owned mining companies has rarely optimised mining revenues. What’s needed instead are improvements in management practices, regulations, regulatory capacity and the investment environment.

African Agricultural Development Needs a New Approach

After being out of fashion for a long period, agriculture has been coming back into the spotlight again as part of development policy. Amid rising concerns about food insecurity and high expectations from agribusiness, policymakers have started to emphasise the importance of agriculture as a source of employment.

Across Africa interest in agricultural investment as a source of employment growth and profit is growing. In South Africa, the National Development Plan identifies agriculture as the potential basis of one million new jobs.

Why are People in the U.S. Still Going Hungry?

Unfortunately, even though the U.S. is bountiful and the world’s biggest individual exporter of food, millions of Americans actually are not.

Each year the Department of Agriculture runs a nationwide survey to determine how many people go hungry. The latest figures show almost 6 percent of households – about 18 million people – are consistently not getting enough to eat. Another 8 percent – 30 million people – have occasional problems feeding themselves.

Lower Your Expectations for Thai Democracy

On 29 January, the latest draft of what may become Thailand’s 20th constitution was released. The draft was not the first since security forces seized power in May 2014 — an earlier draft, by a different body, was rejected in September 2015 amid speculation that the junta had orchestrated the rejection in order to avert tensions and gain more time in power.

Jobless Claims Fall, Services Turnover Rises

People are spending more on services and less jobless claims hint at a recovering American labor market. Initial weekly jobless claims fell from 18,000 to 259,000, far below expectations of a 5,000 drop to 272,000. Continuing claims also fell slightly, as 2.225 million unemployed workers in the United States continue to request help, as they cannot find work. Initial claims fell to the lowest point since October 2015, after several weeks of broad increases. The 4-week moving average for initial claims fell to 267,500.

Is Improving Gender Equality on Wall Street the Key to Fewer Market Crashes?

While the scenes depicted in the film The Wolf of Wall Street might be extreme, they do reflect a truth: that the world of finance is overwhelmingly male. It is this male-dominant culture, fuelled by testosterone that has been blamed by regulators, academics and the popular press for instability and crashes in the financial markets. Moreover, with reason.