The Chancellor’s latest Budget saw the cumulative forecast for government borrowing over the next five years revised up by close to GBP 40bn. This reflects both weaker cyclical growth and also the Office for Budget Responsibility (OBR) taking a gloomier view on UK trend productivity growth.
Caixin | Lijia Zhang burst onto the international literary scene in 2008 with a memoir about her rebellious journey from disillusioned factory worker who spearheaded a walkout in support of the Tiananmen Square demonstrators in 1989 to becoming a writer and journalist. Her first book, Socialism is Great! A Worker’s Memoir of the New China, published by Atlas & Co., describes how she dreamed of escaping the stultifying routine of factory life, while reading Jane Eyre hidden within the folds of The People’s Daily. The book has since been translated into seven languages.
The figures issued by the Bank of Spain have confirmed what we could already see with the naked eye; namely that Spaniards are losing their fear of the future and spending again. After several years of austerity, the consumers in Spain have gradually loosened their purse strings over the past year. And to such an extent that consumer spending rose 3.1% in 2015, almost tripling the 1.2% registered a year earlier.
ZURICH | UBS analysts | In addition to setting out our thoughts by sub-sector (capex, mobile devices, semis), we outline themes and stock specific catalysts for 2015, including a review of potential M&A and possible hikes in cash returns. We also highlight each stock’s investment drivers (positive and negative) through 2015. In general we see another robust year for semi capex, softer telecom capex (but stable vendor revenue), ongoing strong growth in low end smart-phones, a medium-term inventory correction in analog semis (with solid underlying trends), and the continuing emergence of mobile payments.
FRANKFURT | By Lidia Conde | Is Germany living in a crazy world? That’s what many journalists hint at. “The tortoise cycle will continue,” says Johannes Müller, responsible for the management of Deutsche Bank’s large estates. “The interest rates will remain rock-bottom at least until 2016.” This represents an opportunity for the stock exchanges, because the fear of risk is decreasing. “The ECB wants to weaken the Euro with its low interest rates policy, which is also an opportunity to invest in Dollars and real estate.”
FRANKFURT | By Lidia Conde | The headlines on the German media would suggest that we live in a crazy world or on the edge looking into the abyss. The fear of a potential catastrophe due to the anti-crisis policy by Mario Draghi and Janet Yellen has led to many different theories and proposals.
ZURICH | UBS analysts | We review some of the key Eurozone developments of 2014, and look ahead to 2015 and beyond. Eurozone growth has disappointed in 2014, mainly due to Germany, France and Italy. Economic performance over the coming months is likely to remain subdued, given various risk factors, which are likely to weigh on sentiment.
MADRID | The Corner | The Japanese government approved last Saturday a new stimulus program to inject up to ¥3.5 billion (€23.8 billion or $29.1 billion), which will help the less developed regions of Japan and the households with subsidies, vouchers for goods and other similar measures. The government of Japan expect this new stimuli plan to boost the GDP by 0.7%. Despite the many critics to the so-called Abenomics program, the measures are still on-going as the advisor to the new government William H. Saito explained in an interview for The Corner.
SHANGHAI | By Qi Bing via Caixin | The smooth opening of the Hu-Gang Tong, the Shanghai-Hong Kong bourse linkage, marked the entrance of the Chinese capital market to a new era and was a major global event. It follows on progress China has made in opening up its markets after joining the World Trade Organization, and will hopefully greatly boost the country’s economic and social reforms in the years to come.
ZURICH | UBS analysts | The recent general strength of the dollar has a bearing on commodity prices, clearly. Commodities are universally priced in dollars, and as homogenised products dollar appreciation should lead to a decline in commodity prices in dollar terms. However, the strength of the dollar against sterling (in 2008/9) or against the yen (sporadically since 2012) did not lead to UK or Japanese exporters cutting the dollar price of their manufactured products or services.