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World economy 1st March 2024

G20 considers global inflation close to being “effectively tamed”

The G20 finance ministers, meeting in São Paulo (Brazil), consider that inflation is not far from being “effectively controlled” and affirmed that they will continue to pay “close attention” to its trajectory in order to avoid an upturn, Brazilian official sources reported on Thursday. The director of International Affairs of the Central Bank of Brazil, Paulo Picchetti, who participated in the two days of work of the G20 Finance, said…

World economy 28th February 2024

US banks ready to use Fed funding mechanism, Standing Repo Facility, that has been dormant for over two years

Norbolsa| Banks are finally signing up for a US Federal Reserve funding mechanism that has been largely dormant for more than two years, putting them in a stronger position to cope with any stress. It is unclear, however, whether they will want to use it in the event of a crisis. The Standing Repo Facility allows banks to borrow emergency overnight cash from the Federal Reserve through a repurchase agreement,…

World economy 27th February 2024

Japan’s January inflation eases for third month in a row to 2.2% vs. 2.6% previously due to mirror effect in energy prices (-12.1%)

Bankinter : January CPI in Japan reaches +2.2% year-on-year vs. +1.9% expected and +2.6% previous. Underlying: +3.5% vs. +3.3% expected and +3.7% previously. Analysis: The price indicator decelerates for the third consecutive month, although it defies expectations in both readings. This slowdown is mostly due to a mirror effect in energy prices (-12.1% year-on-year). Since, after the strong rebound in energy, as of February 2023, the government implemented subsidies to…

World economy 26th February 2024

Warner Bros. sales in 4Q23 dragged down to $10.284M after 12% drop in ad revenue

Bankinter | The US film and entertainment company has released results that largely fail to meet expectations. 4Q 2023 figures (against Bloomberg consensus): Revenue $10,284M vs. $10,465M estimate, EBITDA $2,471M vs. $2,805M estimate, adjusted EPS -0.16$ vs -0.092$ estimate. The published figures are negatively impacted by the -12% drop in ad revenue. The company beat analyst estimates in direct-to-consumer subscribers, reaching 97.7 million, including acquisitions such as Turkish streaming service…

World economy 26th February 2024

When will China recover from the cyclical downturn?

Alicia García Herrero (Natixis) | China’s economy has been experiencing a structural slowdown, but what is causing concern now is that it is also slipping below its potential and undergoing a cyclical downturn. The faster deceleration in investment compared to consumption, along with weak CPI data, already provides evidence of China’s negative output gap.To assess empirically where China stands with its cycle, we use a model developed by Holston-Laubach-Williams (2023)…

World economy 25th February 2024

Acciona signs agreement potentially worth around €1.37 billion for Toronto underground extension

Link Securities| A consortium participated by Acciona (ANA) has signed an agreement with the Ontario administration in Canada for the development of a new section of the Toronto underground extension currently underway, with an estimated maximum value of up to CA$2 billion (around €1.37 billion), according to the newspaper Expansión. Acciona’s joint venture with Canada’s Amico has thus beaten the other two bids submitted in the tender, the first consisting…

World economy 23rd February 2024

US and China cooperate on something: seeking way out of emerging country debt to avoid wave of sovereign defaults

Norbolsa| One of the most important signs of cooperation we have seen in recent times is the ongoing talks between the US and China to find a way out of the debt of impoverished countries and avoid a wave of sovereign defaults. The talks, which include ways to pre-emptively extend loan periods before countries default, are generally aimed at easing poor countries’ annual debt service burden of more than $400…

World economy 22nd February 2024

Most Fed advisers warn of risk of cutting interest rates too soon

Bankinter: The main messages to come out of the 31 January meeting are: Growth outlook revised upwards after a solid Q4. Employment and wages remain strong but have moderated. The overall and underlying PCE readings will continue to decelerate in 2024, but are still off target. Uncertainty in the projections remains high, but has been reduced. Risks to the inflation projections stand out. Fed members put on the table the…

World economy 21st February 2024

China cuts benchmark 5-year mortgage rate as part of stimulus package to save property sector.

Banca March: China cuts the benchmark 5-year mortgage rate as part of the stimulus package to save the property sector. The LPR rate is designed by 20 commercial banks, which submit the proposal to the central bank every month. There are two horizons: the majority of outstanding loans are linked to the one-year benchmark, while the five-year rate directly affects mortgages. The latter has fallen from 4.2% to 3.95%, considered…

World economy 20th February 2024

China is a relevant market for foreign banks, but there are hurdles beyond market entry

Alicia García Herrero (Natixis) | China’s banking sector technically opened up to full foreign competition in late 2019, as an aftermath of the Trump-Xi meeting in Beijing in 2017. The formal announcement has hardly changed the situation of foreign banks operating in China, which have a small and decreasing market share as well as lower profitability than domestic peers. Lower foreign participation than peers Despite the further opening, the share…

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