Near-dated crude oil prices have rallied on robust demand and falling inventories, but long-dated prices have not moved. BoAML’s analysts see close to 1.5 mn b/d of output oil facing some risk of disruption, primarily across Venezuela, Iran, and Libya.
Three months ago Joachim Fels, PIMCO Global Strategic Advisor suggested that the U.S. administration had gained the upper hand in the cold currency war it had been waging ever since it took office in early 2017, but recent developments suggest that it was premature to declare a U.S. victory.
Stock repurchases by corporates have by far been the most dominant source of demand for American equites in the current bull market. According to figures of AXA IM, equity buybacks since the global financial crisis, for S&P 500 companies, have totalled more than US$3.5tn, continuing a phenomenon that began around three decades ago.
The biggest economic threat today is not the interest rate, nor the exchange rates, nor the possible trade war fuelled by Trump: it’s the debt accumulated by countries across the world. This has increased 12% of GDP since the crisis, totalling 225% of global GDP. Starting with China, followed by Europe and ending up with the US, the threat from the current and future debt is terrifying.
The interest on the US 10-year bond has reached 3%, its highest level in 10 years (blue line). There is nothing exceptional about this given that, as we can see in the graphic, expected inflation has also taken off.
What does Latin America’s bumper election year hold in store for the continent? It is unclear, but as the 2018 regional report on Latin America from Bertelsmann Stiftung’s Transformation Index (BTI) stresses, “structural transformation takes time and patience, which many citizens no longer have to spare.”
By Alicia Garcia Herrero and Jianwei Xu via Caixin | It is not the first time that the world has been caught in the China-U.S. crossfire, but the US protectionist move looks different this time. In fact, they are broader-based both as they involve a much larger number of products and in that they also target the global competition for US companies and not only the US market.
The mythical chain of toy stores Toys “R” Us is closing, reflecting not only the power of Amazon in the US retail sector, but also the end of the historic “mall” and the impact of monetary normalisation.