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china india border tensions

In the World, World economy 18th September 2020

The China-India Conflict Highlights The Urgency For Modi To Do More To Harness India’s Advantages

In 1993, both India and China were equally poor with GDP at USD377 per capita. Fast forward to 2019, India GDP per capita rose to USD2,104 while China fast-tracked to USD10,261… The only country that is comparable in size to China is India, as one has 1.40bn people and the other 1.33bn people, respectively. Combined, they are home to 36 percent of the world’s population. From May until the recent truce engineered in Moscow, the China-India border dispute has threatened to fracture efforts to foster bilateral ties between the two economies, such as the India banning of Chinese apps in response to the conflict.

Fed's balance sheet size

In the World, World economy 17th September 2020

The Fed Officially Adopts A Flexible Inflation Target; Interest Rates Close To 0% Until 2023

Link Securities | After the publication of the Fed’s meeting’s statement and the intervention of Jerome Powell, the central bank’s  “performance” did not end up pleasing everyone. It adhered to the script. The Fed confirmed that the majority of its members do not expect increases in official interest rates until the end of 2023. They also reiterated that they will allow inflation to stay above 2% for a while, until the objective of reducing the jobless rate to pre-pandemic levels is achieved.

suganomics

In the World, World economy 17th September 2020

Suganomics: Where Now For Japan After Abe?

Chief Cabinet Secretary Yoshihide Suga won the Liberal Democratic Party (LDP) leadership election, meaning he was poised to replace Shinzo Abe as prime minister of Japan. Suga has been confirmed by a vote in the Diet on Wednesday 16 September. This comes after Abe announced in late August that he planned to step down due to ill health. Suga could reignite structural reforms although his top priority is containing the virus, says Schroders.

tiktok

World economy 16th September 2020

TikTok And Oracle Reach A “Technical Agreement”; Control And Ownership Remain With China

Intermoney | TikTok rejected Microsoft’s offer and chose Oracle as its partner in the US. Finally, an agreement was reached via a preliminary “technical partnership,” which did not include a complete sale of the short video applications. In turn, Oracle committed to addressing the national security concerns the Trump administration had raised about TikTok. It will also allow existing ByteDance investors to participate in the final agreement.

china industry

In the World, World economy 15th September 2020

China: Growth Gained Momentum In August

China’s economic activity in August exceeded expectations, with industrial production accelerating at the strongest pace in eight months and retail sales growing for the first time this year. The activity data shows that the recovery is becoming more balanced and broad-based as private sector demand is gaining momentum.

Jerome Powell

In the World, World economy 15th September 2020

FED: Subtle To The Point Of Evanescence

The new strategy plays on the asymmetry of monetary policy: it is easier to let inflation accelerate in good times – which only entails not acting (keeping rates unchanged) – than propping it up in bad times, because at some point the latter would require ever more action which would collide with the zero bound limit to policy rates.

And China arrived and defeated the Fed

World economy 14th September 2020

This Week’s Fed Meeting May See A Third Major Change To Its Dollar Strategy

Monex Europe | Recent meeting minutes and speeches have made it clear the FOMC is considering a range of possible calendar and outcome-based forward guidance. The likeliest outcome is further formalisation of the Fed’s shift away from viewing maximum employment as a constraint that will lead to rate hikes. Powell’s speech may provide a template for what outcome based guidance could look like.

BANK OF CHINA

World economy 12th September 2020

The Unintended Economic Impacts Of China’s Belt And Road Initiative

Daniel Wagner | China’s footprint in global foreign direct investment has increased notably since the launch of the Belt and Road Initiative (BRI) in 2013. That served to bring Chinese overseas FDI closer to a level that one would expect, based on the country’s weight in the global economy. However, China actually invested more in countries outside the BRI during the period, given that Chinese investment in developed countries tends to have larger market values, particularly for mergers and acquisitions.

Argentina default noveno

In the World, World economy 11th September 2020

Argentina: IMF Talks To Take Centre Stage

While the new bonds may continue to benefit from a weak US dollar and the lower-for-longer global rate environment, the challenging economic outlook and ongoing uncertainty around the IMF talks will likely cap the yield compression potential.