Markets Archives - Page 549 of 782

Australia’s Economy to Stay Weak

Statistics indicate that Australia’s economy is likely to remain significantly weaker for the rest of this year, and a chunk of the next. Commodity prices continue to slide back and forth and have offset some of the more positive news generated by the housing and consumer market. The institute-leading index for Westpac-Melbourne, generated to indicate the pace of economic growth over the coming 9 months, has contracted to 0.9%. The number was changed in August, from a previous reading of -0.75%.

Hong Kong’s Pro-Democracy Protests Unlikely to Reappear in Singapore

On 27 September, hundreds of people staged a ‘Return Our Central Provident Fund’ (CPF) protest rally at Hong Lim Park, Singapore. Simultaneously in Hong Kong, the Occupy Central movement, combined with student-led classroom boycotts, morphed into a bigger and broader pro-democracy protest — paralysing key financial and administrative locations such as Admiralty, Civic Square and Harcourt Road.

Can China and the U.S. reach a climate-change deal?

For many years China and the United States have faced off over climate change. Now, climate change action is one of the few things the two powers can agree on. A new view on the benefits of climate action goes some way to explain this shift.

Japanese Wages Slowing Economic Growth

Japan’s current leader, Shinzo Abe, has discovered that his country is falling even further into economic troubles lately, instead of rising out of them. At first, it seemed his methods of ‘Abenomics’ could work, with the stock market increasing by three fifths. However, this excitement quickly died down when overshadowed by the underwhelming numbers in consumer spending.

The Latest on Uridashi Bond Issuance

Weekly MOF data shows that Japanese investors have remained net buyers of foreign bonds in recent months. After a weak start to the year that saw Japan investors shed nearly $58 bln of foreign bonds in the 16 weeks through mid-April, the flows have largely reversed.

In the 23 weeks since then, there have only been 6 weeks of foreign bond sales. Total net foreign bond purchases in those 23 weeks stand at $75 bln through the week ended September 26, and have more than fully offset the bond sales seen through mid-April.

Gold Slumps as Deflation Fears Replace Inflation Hawks

Gold dipped below $1,200/oz. last week before recovering above that level in trading Monday, as inflation hedges lose favor amongst investors fearing low growth and lackluster monetary policies could yield deflation in the world’s most advanced economies.

Will Australia Chair a G20 Summit with a Meaningful Outcome?

The genesis of the G20 is a tale of two crises. The first — the Asian financial crisis — led to the creation of the G20 as a meeting of finance ministers and central bank governors from 19 of the world’s largest economies plus the EU. The second — the global financial crisis — led then-US president George W. Bush to elevate the G20 to a leaders’ level meeting. This decision was accompanied by claims that the G20 had replaced the G7 and was now the pre-eminent forum for international economic policy coordination.

A Preview of this Week’s Events Among the Emerging Markets

EM assets are starting the week on the front foot under the favorable constellation of a weaker dollar, stronger stocks and the unexpected result of the presidential elections in Brazil. In addition, after nearly a month of losses (MSCI EM is down nearly 10% from its peak); one also has to assume that positioning is a lot lighter. If the bounce in EM continues, we would expect the higher-beta currencies such as TRY and ZAR to lead the way, and could give us a good opportunity to re-enter relative value trades with these currencies on the short end against stronger EMs.

India’s path to a low-carbon economy includes raising the coal tax

India’s 2014–15 budget doubled the rate of tax on coal from 50 rupees (US$0.82) to 100 rupees (US$1.64) per metric tonne. Though the additional revenue could accelerate the deployment of renewable energy technologies in India, the increase in coal tax is not an unambiguous step in the ‘right’ direction of lowering the carbon intensity of the Indian economy.

Global Currency Movement and other Economic News

The main theme in Asia and Europe has been a somewhat heavier dollar tone, against the major and emerging market currencies. There has not been much of a fundamental driver as perhaps a bit of caution in a stretched-market ahead of key levels ($1.25 for the euro and JPY110 dollar-yen).