Brent crude recently topped USD 70 a barrel for the first time since June 2015 as OPEC announced it would restrain oil output until the end of 2018. Nevertheless, there is still some scepticism over just how high prices will go, in spite of the cartel’s apparently strong commitment to reduce excess supply. According to CaixaBank’s strategists, such doubts are partly due to the uncertainty hovering over the shale production’s industry.
Jerome Powell is bound to have a crash landing in the Federal Reserve. From the very beginning of his mandate, pressure is mounting on him to raise rates. An unpalatable choice for someone who hoped to follow Janet Yellen’s wait-and-see stance for as long as he could.
What are the reasons for the apparent abrupt change in mood on the stock markets? Does this unexpected sell-off mean the end of the bull market? What seems clear is that the environment has changed, volatility is back, and 2018 is looking more complex for investors given central banks that are reducing stimulus.
Athanasios Dimadis and Hung Q. Tran | US is not alone in its worry about debt and deficit. According to the International Institute of Finance statistics, China poses the biggest threat to global economic stability, its total debt having risen astronomically over the last decade. The eurozone is still trying to heal the scars of an enduring economic crisis, with Greece’s unmanageable debt remaining a significant problem.
Barry Eichengreen via Caixin | The New Year has seen a flurry of positive news about yuan internationalization. On January 15th the Bank of France announced that it had added the yuan to its reserve portfolio. The National Bank of Belgium reported the next day that it had acquired 200 million euros worth of yuan-denominated assets.
Francesco Saraceno | The crisis is supposedly over, as the European economy started growing again. But this matters little to those who, as soon as things got slightly better, turned to their old obsession: Debt. Bear in mind, not private debt, that seems to have disappeared from the radars. No, what seems to keep policy makers and pundits awake at night is ugly public debt, the source of all troubles (past, present and future).
It’s clear that the prices of physical and financial assets are growing a lot, while debts are increasing strongly. As experience shows, it’s difficult for everything to get back to normal systematically.
The launch of Amazon Go on January 22 is poised to alter the retail industry by radically simplifying a chore most of us do every day: grocery shopping. Seattle, home to Amazon’s headquarters, saw the opening of a first grocery store that will operate without a checkout line.
Draghi is nervous because the dollar has begun to fall, messing up his plan to withdraw stimulus from an economy which is increasingly more dynamic.
Oil continues to flirt with USD 70 per barrel and it remains to be seen if prices are able to lastingly settle above this much-watched level with the latest up move. Global growth optimism, the bullish market mood and technical momentum still provide robust support.