Markets
China growing hungry
Iris Mir | During the last decade China’s food imports grew by 21% a year. The country is running out of arable land where to farm basic food like grains and cereals or where to grow its cattle. So it’s going abroad to acquire millions of hectares of land from other countries.
U.S. Government Shutdown: A Storm Pushes Through the Markets
MADRID | By Luis Arroyo |The clock is ticking: if Congress can’t agree to budget terms, parts of the federal government will shut down by Monday midnight. But markets have reacted differently than expected to this political pulse between Democrats and Republicans.
Happy 100th Birthday, Fed!
NEW YORK | By Ana Fuentes | The U.S. Federal Reserve has been the talk of the town for weeks because of the tapering soap opera. But how much do we really know about the central bank on its centennial anniversary? An exhibit called “The Fed at 100” opened this Wednesday in New York, aiming to explore the Fed’s pivotal role throughout the history of American finance. And -that’s what we preferred- its response to economic crises.
Tea Partiers for Quantitative Easing?
WASHINGTON | By Pablo Pardo | Last week, the Federal Reserve’s decision to keep bond purchases at the current level was received with some degree of hysteria by the financial markets. These are, of course, the same financial markets that had decided to ignore the subpar US labor market performance in August, the extremely low inflation rate and, in general, the moderate pace of the US recovery.
Peripheral Spreads Should Hold in Well Into Year-end (Barclays)
LONDON | By Cagdas Aksu | The Fed’s dovish surprise in the September FOMC meeting should benefit core peripheral spreads for several reasons. First, we note that even amid all the Fed tapering concerns since May, core periphery spreads versus Germany have behaved very well and never underperformed much, despite the sell-offs seen in other riskier asset classes, such as emerging markets and certain segments of credits markets.
Markets Don’t Open Champagne for Merkel
MADRID | By Francisco López | The landslide victory of Angela Merkel in the German elections has had a vast echo in the media around the world and yet a relatively small impact on the markets, which had already seen the Chancellor’s triumph coming and opted for collecting profits after several days of strong gains.
In a Glimpse- PMI and Central Bank Actions
SAO PAULO | By Marcus Nunes | Markit´s PMI survey is a favorite of central banks and financial institutions. The panel below shows both the global (comprised of 32 countries) and the Eurozone and Japan PMI´s. Trichet´s rate increase ‘folly’ of April and June 2011 as well as Draghi´s “ECB will do whatever it takes” of July 2012 are marked. So is the “Abe effect” in Japan.
US Interest Rates and the New Conundrum
LONDON | By Michael Gavin at Barclays | Today, we mainly remember the ‘Greenspan conundrum’ as a puzzle about the level of US interest rates in the several years leading up to the 2007-08 financial crisis. But the original conundrum was as much about the insensitivity of long-term interest rates to the tightening of monetary that began in mid-2004 as it was about the level of interest rates.
Can Stanley Fisher sit on Bernanke’s chair?
THE CORNER’S FRIDAY WRAP-UP | Buffet says that only Bernanke should take the Fed’s seat and Janet Yallen seems to be the best positioned candidate. But what if this is all a Fed’s manoeuvre?